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Ziff Davis, Inc. (ZD) Intrinsic Value

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

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Ziff Davis, Inc. (ZD)

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Intrinsic Value (DCF)

Current$37.95
→
Intrinsic$106.97
+182%
$70.44$106.97$176.42
Market implies 1% growth for 5 years
DCF analysis suggests ZD could have 182% upside at 8% growth — verify assumptions match your view.
At $38, the market prices in only 1% growth — below historical 8%, suggesting low expectations.
Range: Bear $70 → Bull $176. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →4%6%8%10%
8%$128$141$154$169
10%$89$98$107$117
12%$67$74$81$88
14%$53$58$64$70

Bull Case

  • Bull case ($176) offers 365% upside at 10% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (8%)

Bear Case

  • Bear case ($70) with 6% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$306.37M
Year 2$330.88M
Year 3$357.36M
Year 4$385.94M
Year 5$416.82M
Terminal$6.13B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$283.68MTTM 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 ZD stock undervalued or overvalued?
🟢 UNDERVALUED

ZD trades at $37.95 vs. our DCF-derived intrinsic value of $106.97, implying +212% upside. At a 10.0% WACC and 8.0% projected FCF growth, the market appears to be underpricing the present value of ZD's future cash flows. The bear case ($75.08) still suggests upside, providing margin of safety.

What is ZD's intrinsic value?

Using a 5-year DCF model: Base FCF of $284M, projected at 8.0% 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 $389M net debt and dividing by 0.04B shares: Bear $75.08 | Base $106.97 | Bull $149.61. Current price $37.95 implies +212% to base case.

How is ZD's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% 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 ($5.15B).

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: 18.2x.