Globe Life Inc.GLNYSE

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

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $360.75 per share(market-calibrated)

+151.2%

Upside to Fair Value

Current

$143.60

Pure Model

$394.20

Fair Value

$360.75

Bull Case

$502.24

Bear Case

$311.12

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: $394.20.

What's Driving This Ratingfor GL

✓

CapEx already efficient

CapEx at 0.62% 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 23.81% — 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 (26.90% margin).

→

Moderate revenue growth

Analyst consensus projects 6.13% 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 $487.05/share (29.8x terminal FCF) while exit multiple gives $301.36/share (15.3x 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 78.21% indicates efficient cash generation. FCF reaches $1.9B by Year 10 (21.04% 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)6.59%

Cost of Debt

Pre-tax Cost of Debt3.98%

Tax Rate19.35%

After-tax Cost of Debt3.21%

Equity Weight (E/V)80.91%

Debt Weight (D/V)19.09%

WACC Calculation

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

WACC = (80.91% × 6.59%) + (19.09% × 3.21%)

= 5.94%

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	$1.5B	$1.7B	$1.9B	$2.1B	$2.4B
Tax	$293M	$332M	$371M	$409M	$458M
NOPAT	$1.2B	$1.4B	$1.5B	$1.7B	$1.9B
+ Depreciation	--	--	--	--	--
- Capex	$40M	$45M	$48M	$51M	$55M
- Δ NWC	$5M	$7M	$3M	$3M	$3M
Free Cash Flow	$1.2B	$1.3B	$1.5B	$1.7B	$1.9B
Discount Factor	0.944	0.841	0.749	0.668	0.561
Present Value	$1.1B	$1.1B	$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$1.9B

Terminal Growth Rate2.50%

WACC5.94%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$55.2B

PV of Terminal Value$31.0B

Exit Multiple Method

Year 10 EBITDA$2.4B

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$28.4B

PV of Terminal Value$16.0B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$11.0B

PV of Terminal Value$31.0B

Enterprise Value$42.0B

(-) Net Debt$2.6B

Equity Value$39.4B

Shares Outstanding81M

Price per Share$487.05

Exit Multiple Method

PV of Projected FCFs$11.0B

PV of Terminal Value$16.0B

Enterprise Value$26.9B

(-) Net Debt$2.6B

Equity Value$24.4B

Shares Outstanding81M

Price per Share$301.36

Pure Model Fair Value

$394.20

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%
3.94%	$561.94	$632.09	$605.92	$580.95	$557.14
4.94%	$428.28	$464.92	$516.56	$580.95	$557.14
5.94%	$349.64	$369.09	$394.20	$427.85	$475.27
6.94%	$296.29	$307.93	$322.20	$340.08	$363.15
7.94%	$256.90	$264.43	$273.33	$284.04	$297.15

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

$311.12

116.7% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.58

Base Case

$394.20

174.5% vs current

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

Bull Case

$502.24

249.8% 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 Growth6.13%

Year 3 Revenue Growth7.46%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin23.81%

Terminal EBIT Margin28.00%

Tax Rate19.35%

Historical Capex / Rev0.62%

NWC / Revenue1.43%

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.

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