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AXIS Capital Holdings Limited (AXS) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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AXIS Capital Holdings Limited (AXS)

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Intrinsic Value (DCF)

Current$100.34
→
Intrinsic$456.53
+355%
$313.28$456.53$728.31
Market implies 1% growth for 5 years
DCF analysis suggests AXS could have 355% upside at 25% growth — verify assumptions match your view.
At $100, the market prices in only 1% growth — below historical 25%, suggesting low expectations.
Range: Bear $313 → Bull $728. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$560$604$652$702
10%$394$424$457$491
12%$302$325$349$374
14%$244$262$281$301

Bull Case

  • Bull case ($728) offers 626% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($313) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Net Income Projection

Year 1$1.35B
Year 2$1.69B
Year 3$2.11B
Year 4$2.64B
Year 5$3.30B
Terminal$48.58B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Net Income$1.08BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses Net Income (FCF not meaningful for insurers). See FAQ below for full methodology.

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Frequently Asked Questions

Is AXS stock undervalued or overvalued?
🟢 UNDERVALUED

AXS trades at $100.34 vs. our DCF-derived intrinsic value of $379.50, implying +268% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of AXS's future cash flows. The bear case ($251.56) still suggests upside, providing margin of safety.

What is AXS's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.08B, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-655M net debt and dividing by 0.09B shares: Bear $251.56 | Base $379.50 | Bull $567.91. Current price $100.34 implies +268% to base case.

How is AXS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($31.67B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.