Terminal Value

Noodles & Company (NDLS)


+0.09 (+1.87%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.64
Free cash flow (t + 1) 2.21
Terminal Value 28.91
Present Value of Terminal Value 18.25

Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of Noodles & Company’s cash flows after that period (if we don’t include this, we would have to assume that Noodles & Company stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.