Terminal Value

ProPetro Holding Corp. (PUMP)


+0.06 (+0.84%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 14.19
Free cash flow (t + 1) -120.47
Terminal Value -988.24
Present Value of Terminal Value -509

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