Terminal Value

In a discounted cash flow model you can only forecast cash flow in detail for so many years — the terminal value captures everything that comes after. Market Lens uses the Gordon Growth Model, which assumes cash flow grows at a modest, steady rate forever, then discounts that stream back into today’s dollars alongside the explicit forecast. Because it often makes up the bulk of a DCF’s total, small changes in its growth and discount assumptions can move the estimate a lot — one reason Market Lens shows its terminal value discounted to today, not as a raw future figure.