EXEEXENASDAQ

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DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $344.93 per share(market-calibrated)

+227.6%

Upside to Fair Value

Current

$105.28

Pure Model

$364.63

Fair Value

$344.93

Bull Case

$445.05

Bear Case

$312.41

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: $364.63.

What's Driving This Ratingfor EXE

↓

CapEx normalizing toward maintenance

Historical CapEx is 14.90% of revenue (heavy investment phase). Model fades this to 5.50% by Year 10, freeing up ~$1.5B in annual FCF. This is the biggest driver of long-term cash flow improvement.

✓

Premium margins already priced in

EBIT margin of 32.39% 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.

⚠

Analyst growth decelerates sharply

Revenue growth drops from 6.74% in Year 1 to 1.42% by Year 5 (per analyst consensus). That's below the 2.00% terminal rate, so growth re-accelerates in Years 6-10 — a generous assumption. This growth deceleration is a key reason the model may undervalue the stock if growth re-accelerates.

🎯

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 71.20% indicates efficient cash generation. FCF reaches $4.9B by Year 10 (30.04% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.45

Market Risk Premium4.50%

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

Cost of Equity (Re)6.52%

Cost of Debt

Pre-tax Cost of Debt2.79%

Tax Rate20.29%

After-tax Cost of Debt2.22%

Equity Weight (E/V)83.16%

Debt Weight (D/V)16.84%

WACC Calculation

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

WACC = (83.16% × 6.52%) + (16.84% × 2.22%)

= 5.80%

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	$12.4B	$13.1B	$14.8B	$15.3B	$16.2B
EBIT	$4.0B	$4.2B	$4.8B	$4.9B	$5.2B
Tax	$817M	$859M	$973M	$1.0B	$1.1B
NOPAT	$3.2B	$3.4B	$3.8B	$3.9B	$4.2B
+ Depreciation	$1.2B	$1.3B	$1.4B	$1.5B	$1.6B
- Capex	$1.9B	$1.7B	$1.6B	$1.3B	$889M
- Δ NWC	$30M	$30M	$8M	$10M	$12M
Free Cash Flow	$2.5B	$2.9B	$3.7B	$4.1B	$4.9B
Discount Factor	0.945	0.844	0.754	0.674	0.569
Present Value	$2.4B	$2.5B	$2.8B	$2.8B	$2.8B

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

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$4.9B

Terminal Growth Rate2.00%

WACC5.80%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$130.4B

PV of Terminal Value$74.2B

Exit Multiple Method

Year 10 EBITDA$6.8B

Exit Multiple (EV/EBITDA)14.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$95.4B

PV of Terminal Value$54.3B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$26.6B

PV of Terminal Value$74.2B

Enterprise Value$100.8B

(-) Net Debt$4.4B

Equity Value$96.5B

Shares Outstanding237M

Price per Share$406.55

Exit Multiple Method

PV of Projected FCFs$26.6B

PV of Terminal Value$54.3B

Enterprise Value$80.9B

(-) Net Debt$4.4B

Equity Value$76.6B

Shares Outstanding237M

Price per Share$322.71

Pure Model Fair Value

$364.63

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%
3.80%	$499.64	$556.55	$593.48	$568.89	$545.46
4.80%	$396.14	$422.93	$459.30	$511.50	$545.46
5.80%	$330.82	$345.76	$364.63	$389.22	$422.61
6.80%	$284.54	$293.75	$304.89	$318.61	$335.95
7.80%	$249.34	$255.42	$262.55	$271.02	$281.26

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

$312.41

196.7% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.56

Base Case

$364.63

246.3% vs current

• Analyst consensus
• Terminal growth: 2.0%
• Beta: 0.45

Bull Case

$445.05

322.7% vs current

• +25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 0.38

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

Growth Assumptions (Select Years)

Year 1 Revenue Growth6.74%

Year 3 Revenue Growth6.43%

Year 5 Revenue Growth1.42%

Year 7 Revenue Growth1.65%

Year 10 Revenue Growth2.00%

Terminal Growth Rate2.00%

Margin & Efficiency

Current EBIT Margin32.39%

Tax Rate20.29%

Historical Capex / Rev14.90%

Terminal Capex / Rev5.50%

NWC / Revenue3.86%

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: 14x EV/EBITDA (Energy 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.

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