Globe Life Inc.GLNYSE

Overview Intelligence Charts News Fundamentals Key Metrics Financials Growth Insiders

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $361.77 per share(market-calibrated)

+149.9%

Upside to Fair Value

Current

$144.75

Pure Model

$394.50

Fair Value

$361.77

Bull Case

$500.56

Bear Case

$312.59

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $394.50.

What's Driving This Ratingfor GL

✓

CapEx already efficient

CapEx at 1.10% 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 24.97% — below the sector mature average of 28.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $2.4B (27.20% margin).

→

Moderate revenue growth

Analyst consensus projects 6.43% revenue growth, fading to 2.50% by Year 10. Revenue reaches $8.8B (vs $6.0B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $483.08/share (29.6x terminal FCF) while exit multiple gives $305.93/share (15.7x terminal FCF). The base case averages both methods.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 76.53% indicates efficient cash generation. FCF reaches $1.8B by Year 10 (20.82% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.46

Market Risk Premium4.50%

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

Cost of Equity (Re)6.55%

Cost of Debt

Pre-tax Cost of Debt4.15%

Tax Rate19.35%

After-tax Cost of Debt3.35%

Equity Weight (E/V)81.68%

Debt Weight (D/V)18.32%

WACC Calculation

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

WACC = (81.68% × 6.55%) + (18.32% × 3.35%)

= 5.96%

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	$6.4B	$7.2B	$7.8B	$8.2B	$8.8B
EBIT	$1.6B	$1.8B	$2.0B	$2.2B	$2.4B
Tax	$308M	$349M	$385M	$418M	$464M
NOPAT	$1.3B	$1.5B	$1.6B	$1.7B	$1.9B
+ Depreciation	--	--	--	--	--
- Capex	$70M	$79M	$85M	$90M	$97M
- Δ NWC	$4M	$5M	$2M	$2M	$2M
Free Cash Flow	$1.2B	$1.4B	$1.5B	$1.7B	$1.8B
Discount Factor	0.944	0.841	0.749	0.667	0.560
Present Value	$1.1B	$1.2B	$1.1B	$1.1B	$1.0B

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

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$1.8B

Terminal Growth Rate2.50%

WACC5.96%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$54.3B

PV of Terminal Value$30.4B

Exit Multiple Method

Year 10 EBITDA$2.4B

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$28.7B

PV of Terminal Value$16.1B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$11.1B

PV of Terminal Value$30.4B

Enterprise Value$41.5B

(-) Net Debt$2.5B

Equity Value$39.1B

Shares Outstanding81M

Price per Share$483.08

Exit Multiple Method

PV of Projected FCFs$11.1B

PV of Terminal Value$16.1B

Enterprise Value$27.2B

(-) Net Debt$2.5B

Equity Value$24.7B

Shares Outstanding81M

Price per Share$305.93

Pure Model Fair Value

$394.50

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%
3.96%	$559.46	$632.20	$606.12	$581.25	$557.52
4.96%	$428.38	$464.17	$514.50	$581.25	$557.52
5.96%	$350.88	$369.94	$394.50	$427.36	$473.57
6.96%	$298.13	$309.55	$323.53	$341.04	$363.62
7.96%	$259.08	$266.47	$275.21	$285.71	$298.57

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

$312.59

116.0% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.57

Base Case

$394.50

172.5% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 0.46

Bull Case

$500.56

245.8% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.39

Key Assumptions & Drivers• Financial Services Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth6.43%

Year 3 Revenue Growth7.11%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin24.97%

Terminal EBIT Margin28.00%

Tax Rate19.35%

Historical Capex / Rev1.10%

NWC / Revenue0.94%

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: 12x EV/EBITDA (Financial Services 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