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Growth & Assumptions

Free Cash Flow

1-5Y Growth

6-10Y Growth

Terminal Growth

Discount Rate

Market & Balance Sheet Data

Share Price

Shares Number

Cash & Equiv.

Total Debt

Cash Flow Projection

Show Discount Details10 Year Forecast

Year	2027	2028	2029	2030	2031	2032	2033	2034	2035	2036
Free Cash Flow	100,521.2	130,677.56	169,880.83	220,845.08	287,098.6	344,518.32	413,421.98	496,106.38	595,327.66	714,393.19
Terminal Value	-	-	-	-	-	-	-	-	-	9,197,812.28
Cumulated PVRunning Sum	90,559.64	196,620.48	320,835.88	466,313.37	636,692.41	820,885.98	1,020,014.15	1,235,287.85	1,468,016.18	4,958,941.1

* Scroll horizontally for more yearsAll figures in USD Millions

Valuation Breakdown

Enterprise Value (EV)$4,958,941.1

(+) Cash & Investments$60,608

(-) Total Debt$10,822

Equity Value$5,008,727.1

Shares Outstanding24,583

Fair Value Per Share$203.75

All figures in USD Millions

Calculated Fair Value

$203.75

Current Price$171

Margin of Safety+19.15%

Buy

Why Choose This DCF Tool?

Built for value investors who need accuracy, transparency, professionalism and efficiency.

Instant Reactive Results

See the Fair Value change instantly as you tweak assumptions. Our optimized engine handles complex math in split-seconds.

Transparent Calculation

No black boxes. We show the detailed two-stage DCF formula and breakdown so you can trust every number.

Auto-Fill Stock Data

Instantly pull the latest financials, FCF, and growth rates for thousands of tickers. No manual data entry required.

How to Use This Tool

Calculate your fair value in three simple steps. No finance degree required.

FCF

Enter Cash Flow

Input the company's most recent Free Cash Flow (FCF). If it was an unusual year, use a normalized "Owner Earnings" figure.

Set Growth Rates

Estimate how fast the company will grow for the next 5 years (Growth Stage) and years 6-10 (Transition Stage).

Analyze Results

We discount these back to today's dollars. Compare the Intrinsic Value per share to the current Price.

Valuation Academy

Master the Discounted Cash Flow Model

Stop guessing. Understand the mechanics behind the Discounted Cash Flow (DCF) model. From the basic formula to complex terminal value calculations, we make it simple.

“Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life.”

— Warren Buffett|Berkshire Hathaway Owner's Manual

What is DCF?

Discounted Cash Flow (DCF) is the gold standard for absolute stock valuation. Unlike P/E ratios which are relative, DCF estimates a company's intrinsic value based solely on its ability to generate cash in the future.

Future cash flows are estimated and discounted to calculate their Present Values (PVs). The sum of these PVs, combined with the Terminal Value, determines exactly how much the asset is worth today.

The core philosophy: A dollar today is worth more than a dollar tomorrow. We "discount" future cash back to today's value to see what the business is really worth right now.

The Math Behind the Magic

Don't treat valuation like a black box. The Discounted Cash Flow model relies on two main components: the explicit forecast period (next N years) and the terminal value (everything after).

Note: While we use a standard 10-year (N=10) forecast to better illustrate the math, the forecast period can technically vary (e.g., 5-15 years) based on business stability.

Step 1: Sum of Future Cash Flows (Years 1-10)

First, we estimate how much cash the company will generate for each of the next 10 years. We then "discount" (shrink) each of these amounts back to what they are worth in today's money.

PV (Years 1-10) = Σ [ FCFₙ / (1 + r)ⁿ ]

PVPresent Value

FCFₙFree Cash Flow in Year n

rDiscount Rate (WACC)

nYear Number (1 to 10)

Step 2: Restricted Terminal Value (Year 11+)

Since businesses don't stop after 10 years, we calculate the specific value of all future cash flows from year 11 onwards to infinity using the Gordon Growth Model.

Terminal Value = [ FCF₁₀ × (1 + g) ] / (r - g)

FCF₁₀Cash Flow in Year 10

gTerminal Growth Rate

rDiscount Rate

Step 3: Calculating Share Price

Finally, we add the two parts together, strip out debt, add back cash, and divide by the number of shares to find the intrinsic value per share.

Fair Value = ( PV₁₋₁₀ + PV of TV + Cash - Debt ) / Shares

This result is your "Intrinsic Value" (Fair Price).

Key Variables & Limitations

Critical Inputs

Free Cash Flow: Predicated Free Cash Flow for each year in the forecast period.
Growth Rate: Annual growth rate of Free Cash Flow. It can be estimated based on historical growth rates or projected future growth rates. Usually higher in early years, declining to a sustainable long-term rate.
Discount Rate: The weighted average of cost of equity and cost of debt, reflecting the required return for the investment's risk level.
Terminal Rate: The perpetual growth rate assumption, typically set between 2-4% (roughly GDP growth rate).
Forecast Period: The number of years in the explicit forecast period, commonly 5-10 years.

Model Limitations

• Garbage In, Garbage Out: The model is only as good as your growth assumptions.
• Sensitivity: Small tweaks to long-term growth rates effectively change the result massively.
• Early Stage: Not suitable for unprofitable startups (use VC methods instead).

Frequently Asked Questions

Common questions about DCF valuation and this calculator.

What is a good Discount Rate (WACC)?

For most large, stable US companies, a discount rate between 8% and 10% is standard. This represents the long-term historical return of the S&P 500 (approx. 10%).

If the company is riskier or smaller, you should use a higher rate (12% - 15%) to account for the extra risk. If interest rates are very high, you should also increase your discount rate.

Why are there two Growth Stages?

Companies rarely grow at high speeds forever. The Two-Stage Model allows you to model a period of "High Growth" (Years 1-5) followed by a "Transition" phase (Years 6-10) where growth normally slows down. With two separate growth stages, the dcf model usually provides a more accurate and reasonable value.

Best Practice: Use Analyst estimates for the first 5 years. For the next 5 years, use a lower, more conservative rate (e.g., half the high-growth rate) as the company matures towards the terminal rate.

Why does a small change in Growth Rate change the value so much?

This is the nature of compounding. Because the model forecasts growth for 10 years and then into perpetuity, a difference of just 1-2% compounded over decades results in a massive difference in total cash flow.

Tip: Always run a "Margin of Safety" calculation. If a stock is only a buy at 15% growth, but overvalued at 12%, it might be too risky.

What should I use for Terminal Growth Rate?

Keep it low. The Terminal Growth Rate assumes the company grows at this speed forever. No company can grow faster than the global economy forever, or it would become the entire universe.

A safe range is 2% to 3% (roughly the rate of inflation or GDP growth). Setting this to 5% or 6% is usually a mistake and will artificially inflate the stock's value.

Does DCF work for all stocks?

No. DCF works best for predictable, cash-flow-positive companies (like Coca-Cola, Apple, or Costco).

Banks/Insurance: FCF is hard to define; use Dividend Discount Models instead.
Early Startups: Negative cash flows make DCF impossible; use VC valuation methods.
Cyclical Commodities: Cash flows swing too wildly for consistent projections.

DCF Calculator