Apollo Global Management, Inc.APONYSE

Overview Intelligence Charts News Fundamentals DCF Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

⚠️Model Warnings

•Revenue projections show 72% decline from peak. Analyst estimates may reflect secular headwinds or transition period.

DCF Valuation Summary

Strong Sell

Fair Value: $78.25 per share(market-calibrated)

-37.7%

Upside to Fair Value

Current

$125.57

Pure Model

$75.91

Fair Value

$78.25

Bull Case

$55.38

Bear Case

$87.68

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

7.79%

Calibrated Growth

3.82%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $75.91.

What's Driving This Ratingfor APO

✓

CapEx already efficient

CapEx at 0.22% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 25.98% — below the sector mature average of 34.39%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $2.7B (27.47% margin).

→

Moderate revenue growth

Analyst consensus projects -22.95% revenue growth, fading to 2.50% by Year 10. Revenue reaches $9.8B (vs $30.3B today).

🎯

Market pricing in higher long-term growth

To justify $125.57, the market implies 7.79% perpetual growth — 529bps above the model's 2.50%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 88.64% indicates efficient cash generation. FCF reaches $2.5B by Year 10 (25.79% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.56

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)11.54%

Cost of Debt

Pre-tax Cost of Debt2.76%

Tax Rate10.35%

After-tax Cost of Debt2.47%

Equity Weight (E/V)85.10%

Debt Weight (D/V)14.90%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (85.10% × 11.54%) + (14.90% × 2.47%)

= 10.19%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$23.3B	$30.3B	$8.6B	$9.1B	$9.8B
EBIT	$6.1B	$7.9B	$2.3B	$2.4B	$2.7B
Tax	$628M	$816M	$236M	$253M	$278M
NOPAT	$5.4B	$7.1B	$2.0B	$2.2B	$2.4B
+ Depreciation	$378M	$491M	$140M	$147M	$158M
- Capex	$50M	$65M	$19M	$20M	$21M
- Δ NWC	-$695M	$336M	$21M	$22M	$24M
Free Cash Flow	$6.5B	$7.2B	$2.1B	$2.3B	$2.5B
Discount Factor	0.908	0.747	0.616	0.507	0.379
Present Value	$5.9B	$5.3B	$1.3B	$1.2B	$955M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.5B

Terminal Growth Rate2.50%

WACC10.19%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$33.6B

PV of Terminal Value$12.7B

Exit Multiple Method

Year 10 EBITDA$2.8B

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$34.1B

PV of Terminal Value$12.9B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$26.1B

PV of Terminal Value$12.7B

Enterprise Value$38.8B

(-) Net Debt-$7.2B

Equity Value$46.0B

Shares Outstanding$608M

Price per Share$75.75

Exit Multiple Method

PV of Projected FCFs$26.1B

PV of Terminal Value$12.9B

Enterprise Value$39.0B

(-) Net Debt-$7.2B

Equity Value$46.2B

Shares Outstanding$608M

Price per Share$76.07

Pure Model Fair Value

$75.91

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
8.19%	$83.44	$85.91	$88.81	$92.27	$96.47
9.19%	$77.52	$79.22	$81.18	$83.45	$86.12
10.19%	$73.16	$74.37	$75.75	$77.31	$79.12
11.19%	$69.84	$70.74	$71.74	$72.86	$74.13
12.19%	$67.26	$67.94	$68.69	$69.51	$70.44

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$87.68

-30.2% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.96

Base Case

$75.91

-39.5% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 1.56

Bull Case

$55.38

-55.9% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 1.33

Key Assumptions & Drivers• Financial Services Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-22.95%

Year 3 Revenue Growth12.47%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin25.98%

Terminal EBIT Margin34.39%

Tax Rate10.35%

Historical Capex / Rev0.22%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 18x EV/EBITDA (S&P 500: 22x P/E)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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