Intel CorporationINTCNASDAQ

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

DCF Valuation

⚠️Model Warnings

•Terminal value represents 92% of enterprise value. Valuation highly sensitive to long-term assumptions.

DCF Valuation Summary

Strong Buy

Fair Value: $67.77 per share(market-calibrated)

+48.9%

Upside to Fair Value

Current

$45.50

Pure Model

$67.50

Fair Value

$67.77

Bull Case

$93.51

Bear Case

$46.08

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

3.98%

Calibrated Growth

3.81%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $67.50.

What's Driving This Ratingfor INTC

↓

CapEx normalizing toward maintenance

Historical CapEx is 41.52% of revenue (heavy investment phase). Model fades this to 6.00% by Year 10, freeing up ~$33.1B in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 5.98% — below the sector mature average of 25.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $18.6B (20.02% margin).

→

Moderate revenue growth

Analyst consensus projects 2.00% revenue growth, fading to 3.75% by Year 10. Revenue reaches $93.1B (vs $52.9B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $43.32/share (19.6x terminal FCF) while exit multiple gives $91.69/share (40.2x terminal FCF). The 28x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.75% growth is more conservative. The base case averages both methods.

✓

Model and market roughly agree

Market-implied terminal growth of 3.98% is close to the model's 3.75% (only 23bps apart). The DCF assumptions are well-aligned with how the market is pricing this stock.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 69.60% indicates efficient cash generation. FCF reaches $27.1B by Year 10 (29.08% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.38

Market Risk Premium4.50%

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

Cost of Equity (Re)10.70%

Cost of Debt

Pre-tax Cost of Debt1.67%

Tax Rate30.00%

After-tax Cost of Debt1.17%

Equity Weight (E/V)82.59%

Debt Weight (D/V)17.41%

WACC Calculation

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

WACC = (82.59% × 10.70%) + (17.41% × 1.17%)

= 9.04%

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	$53.9B	$61.8B	$77.5B	$83.4B	$93.1B
EBIT	$3.2B	$3.7B	$7.6B	$12.7B	$18.6B
Tax	$968M	$1.1B	$2.3B	$3.8B	$5.6B
NOPAT	$2.3B	$2.6B	$5.3B	$8.9B	$13.0B
+ Depreciation	$11.7B	$13.5B	$16.9B	$18.1B	$20.3B
- Capex	$22.4B	$20.8B	$19.9B	$14.9B	$5.6B
- Δ NWC	$203M	$760M	$539M	$580M	$648M
Free Cash Flow	-$8.6B	-$5.5B	$1.7B	$11.6B	$27.1B
Discount Factor	0.917	0.771	0.649	0.546	0.421
Present Value	-$7.9B	-$4.2B	$1.1B	$6.3B	$11.4B

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

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$27.1B

Terminal Growth Rate3.75%

WACC9.04%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$531.4B

PV of Terminal Value$223.7B

Exit Multiple Method

Year 10 EBITDA$38.9B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$1.1T

PV of Terminal Value$458.6B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$19.0B

PV of Terminal Value$223.7B

Enterprise Value$242.7B

(-) Net Debt$32.3B

Equity Value$210.3B

Shares Outstanding4.9B

Price per Share$43.32

Exit Multiple Method

PV of Projected FCFs$19.0B

PV of Terminal Value$458.6B

Enterprise Value$477.6B

(-) Net Debt$32.3B

Equity Value$445.3B

Shares Outstanding4.9B

Price per Share$91.69

Pure Model Fair Value

$67.50

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

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
7.04%	$89.16	$93.82	$99.89	$108.14	$120.00
8.04%	$74.63	$77.38	$80.76	$85.05	$90.63
9.04%	$63.65	$65.41	$67.50	$70.03	$73.15
10.04%	$54.92	$56.12	$57.50	$59.12	$61.04
11.04%	$47.74	$48.58	$49.54	$50.64	$51.91

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

$46.08

1.3% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 1.72

Base Case

$67.50

48.4% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 1.38

Bull Case

$93.51

105.5% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 1.17

Key Assumptions & Drivers• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth2.00%

Year 3 Revenue Growth6.82%

Year 5 Revenue Growth3.75%

Year 7 Revenue Growth3.75%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin5.98%

Terminal EBIT Margin25.00%

Tax Rate30.00%

Historical Capex / Rev41.52%

Terminal Capex / Rev6.00%

NWC / Revenue19.25%

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: 28x EV/EBITDA (Technology 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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