Dominion Energy, Inc.DNYSE
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DCF Valuation
⚠️Model Warnings
- •Perpetuity method produces negative equity value (debt exceeds enterprise value). This suggests distress or model limitations.
DCF Valuation Summary
Strong Sell
Base Case: $-72.76 per share
-209.3%
Upside to Target
Bear Case
$-66.30
Base Case
$-72.76
Current
$66.59
Bull Case
$-86.21
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 Debt3.47%
Tax Rate14.12%
After-tax Cost of Debt2.98%
Equity Weight (E/V)57.24%
Debt Weight (D/V)42.76%
WACC Calculation
WACC = (E/V × Re) + (D/V × Rd × (1-Tc))
WACC = (57.24% × 7.68%) + (42.76% × 2.98%)
= 5.67%
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 | $17.1B | $19.2B | $20.8B | $21.7B | $23.0B |
| EBIT | $4.4B | $5.0B | $5.4B | $5.6B | $5.9B |
| Tax | $624M | $700M | $759M | $789M | $838M |
| NOPAT | $3.8B | $4.3B | $4.6B | $4.8B | $5.1B |
| + Depreciation | $3.2B | $3.6B | $3.9B | $4.1B | $4.3B |
| - Capex | $10.2B | $11.4B | $12.3B | $12.8B | $13.6B |
| - Δ NWC | $841M | $344M | $128M | $133M | $141M |
| Free Cash Flow | -$4.0B | -$3.8B | -$3.9B | -$4.1B | -$4.3B |
| Discount Factor | 0.946 | 0.848 | 0.759 | 0.680 | 0.576 |
| Present Value | -$3.7B | -$3.3B | -$3.0B | -$2.8B | -$2.5B |
FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital
Terminal Value Calculation
Perpetuity Growth Method
Year 10 FCF-$4.3B
Terminal Growth Rate2.00%
WACC5.67%
TV = FCF₁₀ × (1+g) / (WACC-g)
Terminal Value-$120.5B
PV of Terminal Value-$69.4B
Exit Multiple Method
Year 10 EBITDA$10.3B
Exit Multiple (EV/EBITDA)15.2x
TV = EBITDA₁₀ × Exit Multiple
Terminal Value$156.1B
PV of Terminal Value$90.0B
Valuation Summary
Perpetuity Growth Method
PV of Projected FCFs-$29.9B
PV of Terminal Value-$69.4B
Enterprise Value-$99.3B
(-) Net Debt$41.4B
Equity Value-$140.8B
Shares Outstanding$839M
Price per Share$-167.73
Exit Multiple Method
PV of Projected FCFs-$29.9B
PV of Terminal Value$90.0B
Enterprise Value$60.1B
(-) Net Debt$41.4B
Equity Value$18.6B
Shares Outstanding$839M
Price per Share$22.20
Base Case Fair Value
$-72.76
Average of perpetuity growth and exit multiple methods
Sensitivity AnalysisPrice per Share
| WACC ↓ / Growth → | 1.00% | 1.50% | 2.00% | 2.50% | 3.00% |
|---|---|---|---|---|---|
| 3.67% | $-221.34 | $-253.63 | $-262.80 | $-255.30 | $-248.16 |
| 4.67% | $-175.09 | $-189.83 | $-210.09 | $-239.70 | $-248.16 |
| 5.67% | $-149.37 | $-157.45 | $-167.73 | $-181.26 | $-199.86 |
| 6.67% | $-133.25 | $-138.18 | $-144.16 | $-151.59 | $-161.03 |
| 7.67% | $-122.36 | $-125.59 | $-129.39 | $-133.92 | $-139.42 |
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
$-66.30
-199.6% vs current
- • -25% vs analyst consensus
- • Terminal growth: 2.0%
- • Beta: 0.88
Base Case
$-72.76
-209.3% vs current
- • Analyst consensus
- • Terminal growth: 2.0%
- • Beta: 0.71
Bull Case
$-86.21
-229.5% vs current
- • +25% vs analyst consensus
- • Terminal growth: 2.5%
- • Beta: 0.60
Key Assumptions & Drivers• Utilities Sector
Growth Assumptions (Select Years)
Year 1 Revenue Growth18.61%
Year 3 Revenue Growth6.07%
Year 5 Revenue Growth2.00%
Year 7 Revenue Growth2.00%
Year 10 Revenue Growth2.00%
Terminal Growth Rate2.00%
Margin & Efficiency
EBIT Margin25.79%
Tax Rate14.12%
Capex / Revenue59.22%
NWC / Revenue31.25%
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.