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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 week ago, by Kjlibert
dcf is going to balance sheet and removing intangible assets (could be trademark, reputation, name, etc., in short nothing tangible)
Add Notes, Comments or Ask Questions »1 week ago, by Taowave
Where is the DCF pulling in their values for Tangable Book Value?Half the time they are negative which I doubt is accurate.In the case of HPQ,book value is 17.1,yet the DCF defaults to .30.Are we supposed to put in the correct values for each field?

Thanks in advance,

T
Add Notes, Comments or Ask Questions »2 weeks ago, by Kjlibert
fair value is just a formula, if not backed by the marketplace it is not valid. book value is real, but keep in mind volume for those investing real money. had a buddy on this one, he got in for 2900 shares and a nice profit but it was not easy to get out with so few shares moved per day.
Add Notes, Comments or Ask Questions »4 weeks ago, by Bpjjpb
Several things pop out at me. First, would I use $21 as my starting earnings or not? Then, would I assume a 20% growth rate for 10 years. That seems very high to me. Third, this company has a one start rating for business predictability. This means you can't predict with any degree of accuracy.

I do believe that GS is underpriced. I would place its value in the $200's somewhere.

Bill
Add Notes, Comments or Ask Questions »1 month ago, by Nishidry
why is this fair value far from the market price?
Add Notes, Comments or Ask Questions »1 month ago, by Nishidry
this fair value is kind of insane is not it ?
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