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Gen Digital Inc. (GEN) Intrinsic Value

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

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Gen Digital Inc. (GEN)

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Intrinsic Value (DCF)

Current$26.38
→
Intrinsic$25.75
-2%
$13.90$25.75$48.27
Market implies 10% growth for 5 years
GEN appears fairly valued — current price aligns with our DCF estimate.
At $26, the market prices in 10% annual cash flow growth — a moderate expectation aligned with historical trends (10%).
Range: Bear $14 → Bull $48. Current price implies expectations near the base case.
Discount ↓Growth →6%8%10%12%
8%$33$37$41$46
10%$20$23$26$29
12%$13$15$17$20
14%$8$10$12$14

Bull Case

  • Bull case ($48) offers 83% upside at 12% growth, 9% discount
  • Conservative 10% growth assumption is achievable based on track record

Bear Case

  • Bear case ($14) implies 47% downside at 8% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$1.32B
Year 2$1.45B
Year 3$1.59B
Year 4$1.74B
Year 5$1.91B
Terminal$28.04B

📐 Model Inputs

Growth Rate9.6%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.21BTTM 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. See FAQ below for full methodology.

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Frequently Asked Questions

Is GEN stock undervalued or overvalued?
🟡 FAIRLY VALUED

GEN trades at $26.38, within 10% of our $25.75 intrinsic value estimate. At 10.0% WACC and 9.6% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $15.04 (bear) to $40.27 (bull).

What is GEN's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.21B, projected at 9.6% 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 $7.31B net debt and dividing by 0.62B shares: Bear $15.04 | Base $25.75 | Bull $40.27. Current price $26.38 implies -2% to base case.

How is GEN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 9.6% 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 ($23.37B).

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: 19.4x.