DCF Studio

    APO · NYQ · Financial Services

    Apollo Global Management, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 637.48

    Market price

    USD 125.91

    Implied upside

    +406.3%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    AdjustedReported capital expenditure averages just 0.46% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 3.97% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    USD 637.48+406.3%
    Exit multiple
    USD 684.93+444.0%
    Market price
    USD 125.91

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn12bn24bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 45.8bnUSD 65.5bnUSD 93.6bnUSD 133.9bnUSD 191.4bn+43.0%
    EBITUSD 4.2bnUSD 6.0bnUSD 8.5bnUSD 12.2bnUSD 17.5bn+43.0%
    NOPATUSD 3.5bnUSD 5.0bnUSD 7.1bnUSD 10.2bnUSD 14.5bn+43.0%
    Add depreciation & amortisationUSD 1.8bnUSD 2.6bnUSD 3.7bnUSD 5.3bnUSD 7.6bn+43.0%
    Less capital expenditureUSD -1.8bnUSD -2.6bnUSD -3.7bnUSD -5.3bnUSD -7.6bn+43.0%
    Less increase in working capitalUSD 2.2bnUSD 3.1bnUSD 4.5bnUSD 6.4bnUSD 9.1bn-43.0%
    Free cashflow to firmUSD 5.7bnUSD 8.1bnUSD 11.6bnUSD 16.5bnUSD 23.7bn+43.0%
    Discount factor0.94860.85350.76800.69100.6217-
    Present valueUSD 5.4bnUSD 6.9bnUSD 8.9bnUSD 11.4bnUSD 14.7bn+28.6%
    Present Value Of The ForecastUSD 47.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.344Reported 1.514, pulled toward 1.0 (Blume)
    Cost of equity12.39%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 74.4bn84.8% of capital
    Total debtUSD 13.4bn15.2% of capital, book value as a proxy
    Tax rate16.7%Effective, capped at statutory
    WACC11.14%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 637.48

    67% of EV

    Forecast FCFF, final year
    USD 23.7bn
    Capex at depreciation, working capital in reinvestment
    USD 14.5bn
    Less reinvestment at g/ROIC (10.1% of NOPAT)
    USD -1.5bn
    Capitalised
    USD 13.1bn
    ROIC (reported)
    24.7%
    Terminal value, undiscounted
    USD 155.1bn
    Terminal value, discounted
    USD 96.4bn
    Enterprise value
    USD 143.7bn
    Less net debt
    USD -234.7bn
    Equity value
    USD 378.4bn

    Exit at 8.0x EBITDA

    Value per shareUSD 684.93

    72% of EV

    Terminal value, undiscounted
    USD 200.4bn
    Terminal value, discounted
    USD 124.6bn
    Enterprise value
    USD 171.9bn
    Less net debt
    USD -234.7bn
    Equity value
    USD 406.6bn

    Spread between methods: 7%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    9.14%685.81696.56708.88723.16739.91
    10.14%652.31659.95668.56678.32689.51
    11.14%625.70631.28637.48644.39652.17
    12.14%604.05608.21612.77617.80623.38
    13.14%586.07589.23592.65596.38600.48

    Outlined: this model. Green text: above today's price of 125.91. Shading: distance from this model's own value.

    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.