Yuanbao Inc. (YB) DCF Valuation & Fundamental Primer
Yuanbao Inc. (YB) trades at $55.07 with a market enterprise value of $14.88B and generated $4.37B in TTM revenue and $1.48B in free cash flow (filed 2026-04-30 (period ended 2025-12-31)). Our 5-year DCF model estimates an implied intrinsic value of $361.59 per diluted share ($102.52B DCF enterprise value, Grade: A+ · 95/100 · Elite SaaS Compounder).
SEC 10-K/10-Q DCF teardown of Yuanbao Inc. (YB): $4.37B TTM revenue (46.2% growth), 71.3% GAAP gross margin, 33.8% FCF margin, 1.7% SBC/revenue, and Rule of 40 score of 80.0%.
Yuanbao Inc. (YB) earns a "Buy" rating and an institutional Quality Score of 95/100 (Grade A+). On $4.37B in baseline revenue (46.2% growth, 71.3% gross margin, 33.8% FCF margin), our 5-year DCF yields an Enterprise Value of $102.52B ($361.59/share vs. $55.07 market price). On the R&D Return Benchmark, YB ranks #2 of 174 (Harvesters · Grade AAA, 4.71× return).
Gross Margin & Unit Economics: Yuanbao Inc. operates at a 71.3% gross margin on $4.37B revenue (1.4 pts below the Software - Application median of 72.7%).
R&D Productivity (Harvesters · Grade AAA): Investing 8.3% of revenue in R&D ($365.1M) generates $4.71 of incremental gross profit per R&D dollar (Rank #2 of 174).
Rule of 40 & Cash Conversion: Combining 46.2% top-line growth with 33.8% FCF margin yields a 80.0% Rule of 40 score (vs. 47.2% cohort median) and $102.52B DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (71.3% Gross Margin · 46.2% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $4.37B | $6.39B | $9.35B |
| Cost of Revenue (COGS) | ($1.25B) | ($1.80B) | ($2.59B) |
| Gross Profit & Margin | $3.12B (71.3%) | $4.59B (71.8%) | $6.76B (72.3%) |
| Research & Development (R&D) | $231.0M | $324.3M | $454.5M |
| Sales & Marketing (S&M) | $1.46B | $2.05B | $2.87B |
| General & Administrative (G&A) | $568.0M | $797.3M | $1.12B |
| Operating EBIT | $858.6M (19.6%) | $1.42B (22.2%) | $2.32B (24.8%) |
| Adjusted EBITDA | $967.9M (22.1%) | $1.58B (24.7%) | $2.55B (27.3%) |
3 Key Underwriting Risks
Structural sensitivities monitored in the 3-Statement Financial Engine
Value-Creation Levers · Quantified Statement Impact
Apply any lever below to write its operating assumptions directly into the 3-Statement Model
Automate cloud hosting & support workflows to lift gross margin from 71.3% to 76.3%.
Align R&D intensity and ASC 350-40 capitalization to the R&D Compounders cohort median, recapturing $134.3M in annual EBITDA.
Lift net dollar retention and expansion velocity by +300 bps, compounding Year 3 revenue to $9.74B.
Yuanbao Inc. (YB) 3-Scenario DCF Valuation Range
Stress-test YB's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Simulate how deploying Gemini workflow automation and autonomous engineering expands YB's Gross Margin, FCF Margin, DCF share price, and 2x2 R&D Return Quadrant.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $55.07).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $405.03 +635% | $432.41 +685% | $464.35 +743% | $502.11 +812% | $547.41 +894% |
| 9.3% | $360.94 +555% | $382.51 +595% | $407.28 +640% | $436.01 +692% | $469.73 +753% |
| 10.0% | $324.77 +490% | $342.11 +521% | $361.77 +557% | $384.23 +598% | $410.15 +645% |
| 10.8% | $294.59 +435% | $308.77 +461% | $324.67 +490% | $342.62 +522% | $363.04 +559% |
| 11.5% | $269.04 +389% | $280.80 +410% | $293.86 +434% | $308.47 +460% | $324.90 +490% |
Institutional Software Quality Scorecard (95/100 · Grade A+)
Exceptional unit economics, disciplined equity dilution, and fortress balance sheet.
Elite deferred revenue float; FCF exceeds operating income by >20%
Minimal dilution friction; management compensation aligned with shareholders
High-quality software margins with healthy balanced growth and profitability
Zero-debt fortress balance sheet with abundant net cash liquidity
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 172% of EBIT driven by upfront annual collections
- Low dilution friction: SBC is only 1.7% of revenue
- Healthy unit economics: 71.3% gross margin
Key Operational & Dilution Risks
Audited R&D Intensity is 8.3% of revenue with a 4.71× incremental gross profit return per R&D dollar. Under your current Stage 1 (46.2% CAGR / 71.3% GM) assumptions, YB projects to 0.97× R&D Return (Grade AA · Harvesters).
Reverse-DCF Solver: What Growth is Priced Into YB?
The current share price only requires -4.5% 5-year CAGR (-3.3% dilution-adjusted), well below historical growth of 46.2%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (1.7% of revenue) and annual share dilution (0.5%/yr). Accounting for both requires -3.3% 5-year revenue CAGR to justify $55.07/sh on a true per-share economic cash flow basis.
Yuanbao Inc. (YB) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $4.37B | $4.37B | $6.39B | $9.35B | $13.67B | $20.00B | $29.24B |
| Gross Profit | $3.12B | $3.12B | $4.56B | $6.67B | $9.75B | $14.26B | $20.85B |
| Operating Income (EBIT) | $858.6M | $858.4M | $1.26B | $1.84B | $2.68B | $3.93B | $5.74B |
| Stock-Based Compensation (SBC) | $74.3M | $74.3M | $108.7M | $159.0M | $232.5M | $339.9M | $497.1M |
| Unlevered Free Cash Flow (FCF) | $1.48B | $1.48B | $2.16B | $3.16B | $4.62B | $6.75B | $9.87B |
| SBC-Adjusted True Cash Flow | $1.40B | $1.40B | $2.05B | $3.00B | $4.38B | $6.41B | $9.37B |
Software - Application Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 6.4 + 0.05 × (Rule of 40) · R² = 13%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Yuanbao Inc. | YB | $15.74B | $4.37B | 71.3% | 33.8% | 80.0% | 1.7% | 3.4× |
| Grab Holdings Limited | GRAB | $20.18B | $2.80B | 42.0% | 27.7% | 84.0% | 10.0% | 6.3× |
| Figma, Inc. | FIG | $18.07B | $749.0M | 88.3% | -9.2% | 39.1% | 126.5% | 23.5× |
| Full Truck Alliance Co. Ltd. | YMM | $71.73B | $11.24B | 86.6% | 25.8% | 70.2% | 4.4% | 5.9× |
| ServiceTitan, Inc. | TTAN | $9.97B | $771.9M | 64.9% | 2.0% | 30.5% | 21.2% | 12.5× |
| InterDigital, Inc. | IDCC | $8.65B | $868.5M | 80.5% | 30.6% | 55.3% | 5.3% | 9.9× |
| OPEN TEXT CORP | OTEX | $8.11B | $5.30B | 63.5% | 13.0% | 23.8% | 2.0% | 2.6× |
| Peer Cohort Median Benchmark (N=6) | 72.7% | 19.4% | 47.2% | 7.6% | 8.1× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 3.4× | $14.88B | $15.74B | $55.07 | 0.0% |
| -20% Multiple Compression | 2.7× | $11.91B | $12.77B | $44.66 | -20.0% |
| -35% Multiple Compression | 2.2× | $9.67B | $10.54B | $36.85 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $21.87B | $22.73B | $79.49 | +46.9% |
Frequently Asked Questions: Yuanbao Inc. (YB) Valuation
What is Yuanbao Inc. (YB)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Yuanbao Inc. (YB) has a Base Case implied value of $361.59 per share (with a Bear Case of $104.28 and a Bull Case of $828.58), compared to its current price of $55.07. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Yuanbao Inc. (YB)'s Rule of 40 score and Free Cash Flow margin?
Yuanbao Inc. achieves a Rule of 40 score of 80.0%, combining a 46.2% revenue growth run-rate with a 33.8% TTM free cash flow margin on $4.37B in trailing twelve-month revenue. In the Software - Application peer cohort, the median Rule of 40 benchmark is 47.2%.
What revenue growth rate is priced into YB stock according to Reverse-DCF analysis?
At $55.07 per share (Enterprise Value of $14.88B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of -4.5%, compared to Yuanbao Inc.'s historical CAGR of 46.2%. Overall market expectations are rated as "Substantial Margin of Safety".
What is Yuanbao Inc. (YB)'s R&D Return Score and innovation productivity?
Yuanbao Inc. (YB) recorded $365.1M in FY R&D expense (8.3% of revenue) and $4.21B in FY gross profit. It is currently unranked on the letter-grade leaderboard (non-USD filer).
How does Yuanbao Inc. compare to Software - Application peers?
Yuanbao Inc. (YB) earns an institutional Software Quality Score of 95/100 (Grade A+ — Elite SaaS Compounder). Across its Software - Application peer group (GRAB, FIG, YMM, TTAN, IDCC), the cohort trades at a median EV/TTM Revenue multiple of 8.1× and a median gross margin of 72.7%.
How does Stock-Based Compensation (SBC) impact Yuanbao Inc. (YB)'s valuation?
Yuanbao Inc. recorded $74.3M in TTM stock-based compensation (1.7% of revenue). When treating SBC as a cash-equivalent compensation expense, Yuanbao Inc.'s SBC-adjusted free cash flow yield is 8.9%, scoring 25/25 on our Shareholder Dilution Friction pillar.