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WFC - Wells Fargo & Co Fair Value Calculator

Earnings Per Share : $
Default value for Earning per Share is the TTM GAAP earning. Use the information at right side to adjust.
Growth Rate In the Next:
Years : %
The number of years in the growth stage, and the average annual growth rate. The default value for the growth rate is the average Earings Per Share (eps) growth rate of the past 10 years. If this growth rate is high than 20% a year, it is set to 20%.
Business Predictability  
Terminal Growth Rate: %
After the growth stage, it is more reasonable to set the terminal growth rate at the inflation rate. The terminal growth rate must be smaller than the discount rate to make the calculation converge.
Years of Terminal Growth:
The number of years for terminal value calculation. The value after this is considered zero. Default is 10.
Discount Rate:
A reasonable discount rate assumption should be at least the long term average return of the stock market, which is about 11%, because investors can always invest passively in an index fund and get an average return. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 10% - 20%.
Tangible Book Value:
Default Book Value is the tangible book value, which may underestimate or overestimate the real value
Growth Value:
Cumulative earnings during the growth stage discounted to current using the discount rate.
Terminal Value:
Cumulative earnings during the terminal stage discounted to current using the discount rate.
= Fair Value:
Intrinsic Value = Future Earnings at Growth Stage + Terminal Value.
Margin Of Safety:

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User Comments

ReplyRrurban - 2 months ago
depends on how you calc FCF. if you add-in changes in working capital,i.e using operating cash flow - capex, then FCF will be higher than net income if there were positive changes in working cap. also, if the company has a lot of goodwill (and thus goodwill amortization), FCF will be higher than net income. i would avoid companies with a lot of goodwill as they have done acquisitions and aren't growing organically (possible flawed biz model) and there is a risk they overpaid for an acquisition and will have to write down goodwill and eps will be hit as a result.
ReplyLibertadpp - 4 months ago
How can Free Cash Flow be always bigger than net income?, because of high ROIC?
Steve Pomeranz
ReplySteve Pomeranz - 4 months ago
It would be nice if we could make adjustments to the dividend growth rate using the 3 year in addition to the 5 year, WFC is a good example because due to the crash, the 5 year is not a true picture of future dividend growth. Using only the 5 year growth rate for WFC, renders the yield on cost number to be of no use.

Otherwise this page is fantastic and a great tool. Thanks.

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