Dominion Energy, Inc.DNYSE

Overview Intelligence Charts News Fundamentals Key Metrics Financials Growth Insiders

DCF Valuation

⚠️Model Warnings

•Terminal value represents 86% of enterprise value. Valuation highly sensitive to long-term assumptions.

DCF Valuation Summary

Strong Buy

Fair Value: $302.21 per share(market-calibrated)

+383.8%

Upside to Fair Value

Current

$62.46

Pure Model

$328.21

Fair Value

$302.21

Bull Case

$442.36

Bear Case

$248.42

Market Reality Check

Model Terminal Growth

2.00%

Market-Implied Growth

0.50%

Calibrated Growth

1.48%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $328.21.

What's Driving This Ratingfor D

↓

CapEx normalizing toward maintenance

Historical CapEx is 59.52% of revenue (heavy investment phase). Model fades this to 5.00% by Year 10, freeing up ~$19.6B in annual FCF. This is the biggest driver of long-term cash flow improvement.

✓

Premium margins already priced in

EBIT margin of 49.89% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

→

Moderate revenue growth

Analyst consensus projects 4.87% revenue growth, fading to 2.00% by Year 10. Revenue reaches $36.0B (vs $16.5B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $390.23/share (29.1x terminal FCF) while exit multiple gives $266.19/share (19.8x terminal FCF). The base case averages both methods.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 150bps below the model's 2.00%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 80.95% indicates efficient cash generation. FCF reaches $19.3B by Year 10 (53.62% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.71

Market Risk Premium4.50%

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

Cost of Equity (Re)7.68%

Cost of Debt

Pre-tax Cost of Debt3.22%

Tax Rate14.73%

After-tax Cost of Debt2.75%

Equity Weight (E/V)52.15%

Debt Weight (D/V)47.85%

WACC Calculation

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

WACC = (52.15% × 7.68%) + (47.85% × 2.75%)

= 5.50%

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	$17.3B	$19.6B	$24.6B	$31.1B	$36.0B
EBIT	$8.6B	$9.8B	$12.3B	$15.5B	$18.0B
Tax	$1.3B	$1.4B	$1.8B	$2.3B	$2.6B
NOPAT	$7.4B	$8.3B	$10.5B	$13.2B	$15.3B
+ Depreciation	$2.8B	$3.2B	$4.0B	$5.1B	$5.9B
- Capex	$10.3B	$9.3B	$8.7B	$7.2B	$1.8B
- Δ NWC	$109M	$172M	$486M	$419M	$96M
Free Cash Flow	-$218M	$2.1B	$5.3B	$10.7B	$19.3B
Discount Factor	0.948	0.852	0.765	0.687	0.585
Present Value	-$207M	$1.8B	$4.1B	$7.3B	$11.3B

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

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$19.3B

Terminal Growth Rate2.00%

WACC5.50%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$562.4B

PV of Terminal Value$329.2B

Exit Multiple Method

Year 10 EBITDA$23.8B

Exit Multiple (EV/EBITDA)16.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$381.4B

PV of Terminal Value$223.3B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$52.8B

PV of Terminal Value$329.2B

Enterprise Value$382.0B

(-) Net Debt$48.7B

Equity Value$333.3B

Shares Outstanding854M

Price per Share$390.23

Exit Multiple Method

PV of Projected FCFs$52.8B

PV of Terminal Value$223.3B

Enterprise Value$276.0B

(-) Net Debt$48.7B

Equity Value$227.4B

Shares Outstanding854M

Price per Share$266.19

Pure Model Fair Value

$328.21

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

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.00%	1.50%	2.00%	2.50%	3.00%
3.50%	$496.30	$579.19	$551.94	$525.98	$501.27
4.50%	$363.10	$399.29	$449.97	$525.98	$501.27
5.50%	$283.91	$303.29	$328.21	$361.43	$407.95
6.50%	$229.96	$241.61	$255.86	$273.66	$296.55
7.50%	$190.09	$197.65	$206.57	$217.29	$230.38

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

$248.42

297.7% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.88

Base Case

$328.21

425.5% vs current

• Analyst consensus
• Terminal growth: 2.0%
• Beta: 0.71

Bull Case

$442.36

608.2% vs current

• +25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 0.60

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Utilities Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth4.87%

Year 3 Revenue Growth6.90%

Year 5 Revenue Growth17.01%

Year 7 Revenue Growth11.01%

Year 10 Revenue Growth2.00%

Terminal Growth Rate2.00%

Margin & Efficiency

Current EBIT Margin49.89%

Tax Rate14.73%

Historical Capex / Rev59.52%

Terminal Capex / Rev5.00%

NWC / Revenue13.59%

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: 16x EV/EBITDA (Utilities sector)

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.

Explore More

S&P 500 Screener

Filter and sort all 500 stocks

Market Movers

Today's biggest gainers and losers

Market Heatmap

Visual sector performance