DCF Calculator

A tool that estimates what a business is worth today by projecting the cash it will generate and discounting those future amounts back to the present. The output is an intrinsic value you can compare with the market price.

Three steps: forecast free cash flow for an explicit period, estimate a terminal value covering everything after it, then discount both back at a rate reflecting risk. Add net cash, divide by shares outstanding, and you have a per-share figure.

Cash from operations minus capital expenditure. Both appear on the cash flow statement in any annual report or 10-K filing. It is the cash genuinely available to owners after the business has paid to maintain itself.

The value of all cash flows after the explicit forecast period, condensed into one figure using the Gordon growth formula: final-year cash flow times one plus the terminal growth rate, divided by the discount rate minus that growth rate.

Stage 1 applies your growth rate for a set number of years. Stage 2 fades that rate linearly down to the terminal rate. This avoids the unrealistic cliff where a company grows 20% one year and 2.5% forever after.

Enterprise value is the value of the operating business. Equity value adds net cash or subtracts net debt, because cash on the balance sheet belongs to shareholders and debt is a claim ahead of them. The per-share figure comes from equity value.

It is free with no account. The reverse DCF and the sensitivity matrix are included rather than reserved for a paid tier, because they are the parts that stop the model from being misleading.

It should reflect the risk of the cash flows and your own required return. A textbook WACC blends the cost of equity and after-tax cost of debt; many investors instead use a flat hurdle, commonly 8% to 12% for equities. Higher risk means a higher rate and a lower value.

Something at or below long-run nominal GDP growth, so roughly 2% to 3%. Any perpetual rate above that implies the company eventually grows larger than the entire economy, which is not a valuation — it is an arithmetic error.

Five to ten explicit years plus a fade is typical. Longer forecasts feel more rigorous and are not: nobody forecasts year 14 usefully. The right instinct is to shorten the forecast and lean on a conservative terminal rate.

Only if it was representative. A year distorted by a one-off legal settlement, an acquisition, or an unusual capex cycle will propagate through every projected year. Use an average of several years, or a normalized estimate.

The calculator accepts a negative figure, but a DCF is the wrong tool for a business that does not yet generate cash. The model will grow a negative number and return a negative value. For pre-profit companies, scenario analysis is more honest.

Diluted, and ideally including expected future stock-based compensation. Using basic shares systematically overstates per-share value at companies that pay staff in equity.

There is no correct figure, but the more sensitive your valuation is to assumptions, the larger it should be. Many value investors use 20% to 50%. The buy-below output applies whatever you choose to the intrinsic value.

Instead of producing a value from assumed growth, it takes the current share price as given and solves for the growth rate that would justify it. It converts a vague question — is this cheap? — into a specific one you can actually research.

By bisection. The model is run repeatedly, adjusting the stage 1 growth rate until the resulting per-share value matches the share price to a very tight tolerance. Value increases monotonically with growth, so the search always converges.

Compare it against what the company has actually achieved and what its industry plausibly allows. If the market implies 8% and the business has compounded at 15% with a durable moat, that gap is your thesis. If the market implies 25%, the burden of proof is on you.

Either no share price is entered, or no growth rate in the searched range (−50% to 100%) produces the current price. The latter usually means the price cannot be reconciled with your other assumptions — which is itself informative.

It is only as reliable as its inputs, and it is extremely sensitive to two of them. That is not a reason to avoid it, but it is the reason this page shows a sensitivity grid rather than a single confident number.

Because it represents every year beyond your forecast, which is most of a company's life. A share of 60% to 80% is normal for a ten-year forecast. When it climbs past 85%, the explicit forecast has stopped doing meaningful work.

Because the discount rate is not greater than the terminal growth rate. The Gordon growth formula divides by the difference between them, so an equal or inverted pair implies infinite value. The calculator says so rather than printing a nonsense figure.

For pre-revenue or pre-cash-flow companies, for banks and insurers where free cash flow is not meaningful, for cyclical businesses at an extreme of the cycle, and for anything where the outcome is genuinely binary. A relative valuation or scenario approach fits those better.

The common free tools give a single intrinsic value from a single set of assumptions and frequently keep the reverse DCF behind a subscription. This one includes the reverse DCF, states what proportion of the value is terminal, and shows a full sensitivity grid — the three things that keep the model honest.

Not dynamically. Share count is a fixed input, so ongoing buybacks or dilution are not modeled year by year. For a company changing its share count materially, adjust the input or run the model twice at different share counts.

No. It is the arithmetic consequence of assumptions you chose. It is not a forecast of where the share price will go, not a recommendation, and not advice. Treat it as a way to make your own assumptions explicit and testable.

No. The entire model runs in your browser. Nothing you enter is transmitted, logged or stored, which you can verify in your browser's network panel.