Intrinsic Value Calculator

Estimate a stock's true worth using a Discounted Cash Flow (DCF) model

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Calculate Intrinsic Value

Enter financial details to estimate the stock's intrinsic value using a Discounted Cash Flow (DCF) model.

Intrinsic Value Formula

IV = (Σ(CFt / (1+r)t) + TV / (1+r)n - Debt + Cash) / Shares

Where CFt is Free Cash Flow, r is discount rate, TV is terminal value, n is number of periods

Select the number of years of historical Free Cash Flow to include for trend analysis.
Enter Free Cash Flow for Year 1 from financial statements. Can be positive or negative.
Enter Free Cash Flow for Year 2 from financial statements. Can be positive or negative.
Enter Free Cash Flow for Year 3 from financial statements. Can be positive or negative.
Choose between perpetual growth or a two-stage growth model with high-growth and terminal phases.
Choose between Gordon Growth model or exit multiple for terminal value.
Use CAPM (with capital structure) or specify a manual discount rate.
The return on a risk-free investment, like government bonds. Used in CAPM.
The expected return of the overall market. Used in CAPM.
Measures the stock's volatility relative to the market. A beta >1 indicates higher volatility.
Percentage of capital structure from equity. Must sum to 100% with debt weight.
Percentage of capital structure from debt. Must sum to 100% with equity weight.
The company's borrowing cost before tax. Used in CAPM.
The company's effective tax rate for interest deduction.
The total number of shares currently held by shareholders.
The company's total debt. Optional; defaults to 0 if not provided.
The company's liquid assets. Optional; defaults to 0 if not provided.
Number of years for high-growth phase in two-stage model.
Growth rate during high-growth phase in two-stage model.
Long-term growth rate after high-growth phase for Gordon Growth model.

Understanding Intrinsic Value

Intrinsic value represents a stock's true worth based on its future cash flows, discounted to present value. Here's how to interpret and use it in your investment decisions.

Undervalued

Market Price < Intrinsic Value

The stock may be a buying opportunity as it trades below its estimated true worth.

Fairly Valued

Market Price ≈ Intrinsic Value

The stock is priced close to its estimated true worth, indicating fair valuation.

Overvalued

Market Price > Intrinsic Value

The stock may be overpriced, suggesting caution or potential selling.

How to Use the Intrinsic Value Calculator

  1. Enter Historical Free Cash Flow

    Input historical Free Cash Flow (FCF) for 3–5 years to analyze trends and inform projections.

  2. Select Growth Model

    Choose Two-Stage Growth (preferred) for high-growth and terminal phases, or Perpetual Growth for simplicity.

  3. Choose Terminal Value Method

    Select Gordon Growth for long-term growth or Exit Multiple for market-based valuation.

  4. Specify Discount Rate

    Use CAPM (with capital structure, risk-free rate, market return, and beta) or a manual discount rate.

  5. Enter Financial Metrics

    Input Outstanding Shares, Total Debt, and Cash and Equivalents from the most recent financial statements.

  6. Provide Growth Rates and Exit Multiple

    Enter high-growth years, high-growth rate, and terminal growth rate or exit multiple based on industry and historical trends.

  7. Calculate and Interpret

    Click “Calculate” to compute the intrinsic value per share. Compare with market price to assess investment potential.

Key Applications of Intrinsic Value

  • Identifying undervalued or overvalued stocks
  • Making informed buy or sell decisions
  • Assessing long-term investment potential
  • Comparing stocks within the same industry
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