Model growth, risk, and terminal value with clarity. See fair value estimates across flexible assumptions. Export results for sharper investing decisions and cleaner reporting.
Use this calculator to estimate enterprise value, equity value, intrinsic value per share, and a margin-of-safety entry price using a two stage discounted cash flow framework.
| Input | Example Value | Meaning |
|---|---|---|
| Current Free Cash Flow | $120,000,000 | Base cash flow before forecast growth. |
| Initial Growth Rate | 12% | Early high growth assumption. |
| Annual Growth Fade | 1.5% | Reduces growth toward maturity. |
| Stage One Years | 5 | Length of explicit forecast period. |
| Discount Rate | 10% | Required return or WACC estimate. |
| Terminal Growth Rate | 3% | Stable perpetual growth assumption. |
| Cash | $35,000,000 | Added to enterprise value. |
| Debt | $50,000,000 | Subtracted from enterprise value. |
| Shares Outstanding | 25,000,000 | Used for per share value. |
Stage one forecast: FCFt = FCFt-1 × (1 + gt)
Present value of each cash flow: PVt = FCFt ÷ (1 + r)t
Terminal value: TV = FCFfinal × (1 + gterminal) ÷ (r - gterminal)
Enterprise value: Sum of discounted stage one cash flows + discounted terminal value
Equity value: Enterprise value + cash − debt
Intrinsic value per share: Equity value ÷ shares outstanding
This version also fades growth annually until it reaches the terminal growth rate, helping model a realistic move from high growth to mature growth.
A two stage model separates a business into a higher growth period and a mature steady period. This often fits real companies better than a single constant growth assumption. It also makes sensitivity testing easier because growth, fade, terminal value, and discount rate are visible inputs.
Use conservative assumptions when uncertainty is high. Small changes in discount rate or terminal growth can materially change valuation outcomes.
It estimates intrinsic value by discounting future free cash flows across a high growth period and a stable perpetual period.
The Gordon Growth formula requires discount rate to exceed terminal growth. Otherwise, terminal value becomes mathematically unstable or unrealistic.
This calculator is structured like a firm valuation model. It converts enterprise value to equity value by adjusting for cash and debt.
Many analysts use WACC for enterprise DCF models. Use a rate matching the business risk, capital structure, and cash flow type.
It reduces the initial growth rate each year until the model approaches terminal growth, creating a smoother transition into maturity.
A margin of safety lowers the buy threshold below estimated fair value, helping absorb model error and business uncertainty.
Yes, but keep inputs consistent. If you use quarterly cash flow, annualize it first or adjust growth and discount assumptions carefully.
DCF models are highly sensitive to assumptions. Even small changes in growth, margins, reinvestment, or discount rate can shift value significantly.
Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.