Beverages - Non-Alcoholic · NASDAQ
Current Price
$155.29
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on PepsiCo, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
PepsiCo, Inc. manufactures, markets, distributes, and sells various beverages and convenient foods worldwide. The company operates through seven segments: Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East and South Asia; and Asia Pacific, Australia and New Zealand and China Region. It provides dips, cheese-flavored snacks, and spreads, as well as corn, potato, and tortilla chips; cereals, rice, pasta, mixes and syrups, granola bars, grits, oatmeal, rice cakes, simply granola, and side dishes; beverage concentrates, fountain syrups, and finished goods; ready-to-drink tea, coffee, and juices; dairy products; and sparkling water makers and related products. It serves wholesale and other distributors, foodservice customers, grocery stores, drug stores, convenience stores, discount/dollar stores, mass merchandisers, membership stores, hard discounters, e-commerce retailers and authorized independent bottlers, and others through a network of direct-store-delivery, customer warehouse, and distributor networks, as well as directly to consumers through e-commerce platforms and retailers. The company was founded in 1898 and is headquartered in Purchase, New York.
ROIC (TTM)
13.2%
ROE (TTM)
43.9%
FCF Yield
4.17%
Based on trailing twelve-month data, PEP shows a free cash flow per share of N/A and a ROIC of 13.2%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 4.17% are important context metrics when evaluating PEP's stock valuation relative to peers.
The intrinsic value of PEP depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether PEP is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $155.29. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on PepsiCo, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Beverages - Non-Alcoholic industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting PEP's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For PepsiCo, Inc., this means projecting how much free cash flow the Beverages - Non-Alcoholic will produce over the next 5-10 years, then discounting those amounts to today's dollars. PEP's ROIC of 13.2% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PEP, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
