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Fair Value Calculator

How to calculate intrinsic value using discounted cash flow model?

Enter Symbol:
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 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.
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%.

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 = Book Value + Future Earnings at Growth Stage + Terminal Value.
Margin Of Safety:

Go to Undervalued Predictable Companies for the most undervalued companies as measured by Discount Cash Flow Model.

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User Notes, Comments, and Questions

Add Notes, Comments or Ask Questions »1 month ago, by Gurufocus

a lot of times you can actually buy the stocks at lower prices than they paid, see Guru bargains

Add Notes, Comments or Ask Questions »1 month ago, by Sivasamboo Vimalachandran

Though we pay annual fees why we don,t get information to purchase at the price where Gurus are purchasing

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