Calculate Intrinsic Value
Enter a ticker symbol above to calculate the intrinsic value using DCF analysis.
Adjust growth rate, discount rate, and terminal growth to see how valuations change.
How DCF Valuation Works
Estimate the company's free cash flow for the next 5 years based on 5-year historical CAGR (using the best of revenue, EPS, or FCF growth).
Discount future cash flows to present value using your required rate of return (typically 8-12%).
Estimate the value of all cash flows beyond year 5 using a perpetual growth rate (typically 2-3%).
Sum all present values and divide by shares outstanding to get per-share intrinsic value.
Frequently Asked Questions
How do you calculate intrinsic value of a stock?
Intrinsic value is calculated using a Discounted Cash Flow (DCF) model. We project the company's future free cash flows for 5 years using 5-year historical CAGR (taking the best of revenue, EPS, or FCF growth with an 8% floor and 25% cap), discount them to present value using a required rate of return (typically 8-12%), add a terminal value for cash flows beyond year 5, and divide by shares outstanding to get per-share intrinsic value.
What discount rate should I use?
The discount rate represents your required rate of return. Typically, 8-10% is used for large, stable companies (blue chips), 10-12% for mid-sized companies, and 12-15% for smaller or riskier companies. Our calculator defaults to 10% but allows adjustment from 6-18%.
What is the difference between Bear, Base, and Bull cases?
Base case uses the company's 5-year historical CAGR (best of revenue, EPS, or FCF growth). Bear case applies a 20% haircut to growth and adds 2% to the discount rate for a pessimistic valuation. Bull case adds 20% to growth and reduces the discount rate by 1.5% for an optimistic scenario. Compare current price to all three to assess risk/reward.
What does 'undervalued' mean?
A stock is considered undervalued when its current market price is below its calculated intrinsic value. For example, if a stock trades at $100 but has an intrinsic value of $120, it's undervalued by 20%. However, intrinsic value is an estimate—always consider multiple factors before investing.
How accurate is a DCF valuation?
DCF models are only as accurate as their inputs. Small changes in growth rate or discount rate can significantly impact results. Use DCF as one tool among many: compare with P/E ratios, analyst estimates, and industry multiples. Never rely solely on any single valuation method.