Build fair value estimates from growth and risk. Run bull, base, and bear scenarios instantly. Make smarter investing decisions with disciplined valuation inputs always.
DCF approach: Project free cash flow per share for 10 years, discount each year by the discount rate, then add a terminal value using the Gordon growth model.
Dividend model: Discount 5 years of growing dividends, then apply a terminal value at year 5 using terminal dividend growth.
| Case | Current Price | FCF/Share | g (1-5) | g (6-10) | Discount | Terminal g | Net Cash/Share | Fair Value | MOS (15%) |
|---|---|---|---|---|---|---|---|---|---|
| Base | 25.00 | 1.60 | 10% | 6% | 11% | 3% | 0.00 | 32.40 | 27.54 |
| Bull | 25.00 | 1.60 | 13% | 9% | 10% | 3% | 0.00 | 40.10 | 34.09 |
| Bear | 25.00 | 1.60 | 7% | 3% | 12% | 3% | 0.00 | 26.20 | 22.27 |
Fair value responds most to starting free cash flow per share, growth assumptions, and the discount rate. This calculator projects cash flows for ten years, then adds a terminal value. Small changes in early growth compound, while the discount rate compresses every future dollar. Use realistic inputs, document sources, and update assumptions each quarter. Validate with multiple methods, then compare price to your range. Use realistic inputs, document sources, and update assumptions each quarter. Validate with multiple methods, then compare price to
The discount rate represents the return you demand for risk. A higher rate lowers present value sharply, especially for long duration cash flows. Terminal growth should remain conservative and typically below the discount rate; cases where terminal growth meets or exceeds the discount rate are rejected because the terminal formula becomes unstable.
Instead of one point estimate, the tool creates Bull, Base, and Bear outcomes by shifting growth and discount rate in percentage points. A Bull case might add three points to both growth stages and reduce discount by one point, while Bear does the opposite. Use the range to test robustness.
The 3x3 sensitivity grid varies discount rate by plus or minus one percent and terminal growth by plus or minus half a percent. This reveals where fair value flips from attractive to expensive. If your conclusion changes with tiny tweaks, inputs are too optimistic or the stock is priced near fair value.
Margin of safety converts intrinsic value into a stricter buy threshold. For example, a 15% margin reduces a 32.40 estimate to 27.54. This buffer helps account for forecasting error, cyclicality, and valuation risk. It is most useful when uncertainty is high, competition is intense, and outcomes are skewed.
Start with trailing twelve month free cash flow and shares outstanding from filings. Growth can be anchored to revenue trends, margin structure, reinvestment capacity, and competitive durability. Discount rate can align with your required return and stability. Terminal growth often tracks long run economic growth in the company’s core markets and inflation expectations.
Use discounted cash flow for businesses where cash generation reflects economics. Use the dividend model for mature dividend payers where payouts track long term value.
The terminal value uses a growth perpetuity formula. If terminal growth is equal to or greater than the discount rate, the denominator becomes zero or negative and valuation becomes unrealistic.
It adjusts equity value after operating cash flows are valued. Net cash increases fair value; net debt reduces it, reflecting claims ahead of shareholders.
Match it to your required return and business risk. Higher leverage, cyclicality, or uncertainty usually warrants a higher discount rate.
It shows how fragile the estimate is. If fair value swings widely with small rate changes, you should widen your margin of safety or revisit assumptions.
CSV exports the key summary fields and assumptions. PDF exports a readable text report from the results panel, suitable for notes and sharing.
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.