Calculate the intrinsic value of a company or stock using a discounted cash flow model. Includes terminal value, fair value per share, and sensitivity analysis.
Discounted Cash Flow (DCF) analysis is the gold standard for intrinsic valuation. It estimates a company's value based on its projected future free cash flows, discounted back to present value using the weighted average cost of capital (WACC). If the resulting fair value per share is above the current stock price, the stock may be undervalued.
A DCF model has two phases: the explicit projection period (typically 5-10 years) where you forecast each year's cash flow, and the terminal value that captures all cash flows beyond the projection period as a perpetuity. The terminal value often accounts for 50-80% of total enterprise value, which is why the terminal growth rate assumption is so critical.
This calculator handles both constant-growth and linear-fade growth assumptions, projects year-by-year cash flows with discount factors, and computes fair value per share after subtracting net debt. The sensitivity table shows how the valuation changes across different discount rates and terminal growth rates — essential for building conviction in your investment thesis.
Every serious equity analyst builds DCF models. This calculator automates the computation while keeping the inputs transparent and adjustable. The sensitivity analysis is the most important output because small changes in discount rate or terminal growth can move fair value sharply.
Enterprise Value = Σ [FCFₜ / (1+r)ᵗ] + Terminal Value / (1+r)ⁿ Terminal Value = FCFₙ₊₁ / (r − g) Equity Value = Enterprise Value − Net Debt Fair Value Per Share = Equity Value / Shares Outstanding Where r = discount rate, g = terminal growth, n = projection years.
Result: Fair Value ≈ $166/share
With $10M initial FCF growing at 8% (fading to 3%), discounted at 10% over 10 years, the enterprise value is approximately $171M. Subtracting $5M net debt gives $166M equity value, or $166 per share.
DCF is a present-value model, so the quality of the result depends on the quality of the cash flow forecast. Use a realistic growth path, not a smooth curve that ignores changes in margin or reinvestment needs.
Terminal value often dominates the result, which is why terminal growth and discount rate sensitivity matter so much. A small change in either assumption can produce a very different fair value per share.
Compare the output against the current market price and a reasonable peer set. The calculator is most useful when it helps you see whether the implied upside is driven by operating assumptions or by an aggressive terminal assumption.
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This worksheet starts with current annual free cash flow, projects it forward at the entered growth rate for the selected forecast period, discounts each year back at the chosen discount rate, then adds a Gordon-growth terminal value. It converts enterprise value into equity value by subtracting net debt and divides by shares outstanding to estimate fair value per share.
The model is useful for scenario analysis, not for false precision. It assumes the user has already chosen a reasonable free-cash-flow base and discount rate, and it does not build a full revenue, margin, tax, or reinvestment forecast from first principles.
DCF values a business based on the idea that a dollar today is worth more than a dollar tomorrow. All future cash flows are discounted to their present value.
Use WACC (weighted average cost of capital) for enterprise value models. Typical ranges are 8-12% for most companies, higher for risky businesses.
Because the projection period only covers 5-10 years, while the terminal value captures the infinite future. This is why terminal growth rate sensitivity is critical.
Terminal growth should not exceed long-term GDP growth (typically 2-3%). A company cannot grow faster than the economy forever.
FCF = Operating Cash Flow − Capital Expenditures. You can find both on the cash flow statement in any company's SEC filings.
Enterprise value = equity value + net debt. If valuing per share, you need equity value. If comparing to EV/EBITDA, you need enterprise value.