Rethink your terminal value, it's probably not working!?

  • Author:
    Geoff Robinson
  • Level:
    Intermediate to Advanced
  • Study time:
    Always adding content
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Course overview
In the intricate world of financial analysis, the methods employed to estimate a company's enduring worth often spark vigorous debate. Terminal value calculations, a critical component of Discounted Cash Flow (DCF) valuations, frequently bear the brunt of scrutiny. Critics argue that terminal values are disproportionately influential, highly sensitive, and ultimately rely on speculative projections, labeling them as mere educated conjectures at the culmination of a valuation process. However, this criticism might be misplaced or, at least, exaggerated.

 The prevalent discontent with terminal values, we posit, stems from a fundamental misunderstanding of the correct formula and methodology rather than an inherent flaw within the concept itself. Many of the perceived problems with terminal values actually originate from deeper issues within the valuation exercise, which only become apparent when attempting to project the business's long-term future. In this context, our commentary endeavors to reframe the dialogue on terminal values. We will elucidate our method for approaching terminal value estimations and discuss strategies to mitigate the risks associated with these projections, ensuring a more balanced and justifiable outcome in financial analysis.

What's included?

  • Fundamental research written by Geoff Robinson
  • Analyst-curated insights
  • Embedded podcasts
  • Embedded videos
  • Downloadable models, where applicable

Who should read this?

This note is essential reading for financial analysts, valuation consultants, portfolio managers, investment bankers, CFOs, and any other professionals involved in corporate finance and valuation. Additionally, it would benefit academics and students specializing in finance who seek a deeper understanding of the practical challenges and methodologies associated with DCF valuations. Institutional investors and anyone responsible for making long-term investment decisions based on the intrinsic value of companies may also find the discussions here particularly insightful.


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Geoff Robinson FCA FMVA MFM

Thought leader, instructor, writer, financial influencer, Former UBS Managing Director and 8x #1 ranked analysts EMEA Institutional Investor Survey
Geoff has had a varied career. He was a Managing Director within UBS Equity Research, leading their Global Fundamental Analytics franchise. During this time, he was #1, ranked 8x in the EMEA Institutional Investor Survey. Before UBS, he was a material equity investor and LBO co-investor in two market exited training consultancies. Geoff has a passion for learning and is well-known for his ability to break down complex subject matter and distil it to an audience in a digestible and engaging manner. He brings this passion to