§ Valuation models
Terminal value concentration
Glossary version 2026-07-12.v1 · reviewed July 12, 2026
The percentage of a DCF valuation that comes from cash flows beyond the explicit forecast period. A high percentage means the result depends heavily on distant assumptions.
Terminal value concentration shows how much of a DCF comes from the terminal value rather than the explicitly forecast years. Concentration above 60% deserves attention because small changes in terminal growth or the discount rate can dominate the result. Reports disclose high concentration and use sensitivity analysis and other valuation models to test whether the conclusion remains stable.