Free calculator
Stock valuation calculator (DCF)
A two-stage discounted cash flow. Change any input and the value per share, the upside and the sensitivity table update at once.
Intrinsic value per share
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- Enterprise value
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- Equity value
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- From terminal value
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Value per share: discount rate × terminal growth
Illustrative defaults, not a real company. The model is deliberately simple: it assumes free cash flow is the right base and ignores changes in share count. Build scenarios with a company’s own filed numbers in the Stock Analyzer.
How to use the stock valuation calculator
Take the eight inputs from the latest annual report (Form 10-K for US companies). Money figures are in millions, except the share price.
| Input | What it means | Where to find it |
|---|---|---|
| Free cash flow last year ($ millions) | Cash from operations after capital spending | Cash flow statement: operating cash flow minus capital expenditures (purchases of property and equipment) |
| Growth years 1–5 (%/yr) | Annual free cash flow growth in the first five years | Your estimate, anchored to the past five years and consensus |
| Growth years 6–10 (%/yr) | Slower growth as the business matures | Usually between the first-stage rate and terminal growth |
| Terminal growth (%) | Growth every year after year 10 | Commonly 2% to 3%, below long-run economic growth |
| Discount rate (%) | The annual return you require for the risk | WACC or your own hurdle rate |
| Net debt ($ millions; negative = net cash) | Borrowings minus cash | Balance sheet: short- and long-term debt minus cash and short-term investments |
| Diluted shares (millions) | Shares including options and restricted stock | Income statement (weighted-average diluted); the 10-K cover page gives basic shares at a recent date |
| Share price ($) | Used only for the upside or downside | Any quote |
For indebted companies, add back after-tax interest. US accounting puts interest paid inside operating cash flow, and the calculator subtracts net debt separately, so skipping this counts debt twice.
The DCF formula behind the calculator
Free cash flow grows for ten years, at the first rate for years 1–5 and the second for years 6–10. Then, with r the discount rate and g terminal growth:
Present value of year t = FCFₜ ÷ (1 + r)ᵗTerminal value = FCF₁₀ × (1 + g) ÷ (r − g), discounted by (1 + r)¹⁰Enterprise value = ten present values + discounted terminal valueValue per share = (enterprise value − net debt) ÷ diluted shares
With the defaults ($100 million of free cash flow, 8% then 5% growth, 2.5% terminal growth, a 9% discount rate, $200 million of net debt, 50 million shares, a $30 price):
- Free cash flow rises to $146.9 million in year 5 and $187.5 million in year 10. The ten discounted cash flows sum to $913.8 million.
- Terminal value = 187.5 × 1.025 ÷ (0.09 − 0.025) = $2,957 million, worth $1,249 million today after dividing by 1.09¹⁰ (2.367).
- Enterprise value = 913.8 + 1,249.1 = $2,163 million. Equity value = 2,163 − 200 = $1,963 million.
- Intrinsic value = 1,963 ÷ 50 = $39.26 per share, 30.9% above the $30 price.
The stock valuation guide values the same company with only five years of growth before the terminal value and gets $35.85; the extra five years at 5% add about $3.40 a share. For a line-by-line build of a full model, see the DCF model example.
How to read the result and the sensitivity table
- Intrinsic value per share is an estimate under your inputs, not a price target.
- Upside or downside is value ÷ price − 1. A positive figure means your inputs are more optimistic than the market's.
- Terminal value share is the part of enterprise value that arrives after year 10: 57.8% at the defaults. When it approaches 80% or more, the answer rests mostly on the perpetuity assumption.
- Enterprise and equity value can be compared with the company's actual market value.
The sensitivity table varies the two long-run inputs around your choices. At the defaults:
| Discount rate | Terminal growth 2.0% | Terminal growth 2.5% | Terminal growth 3.0% |
|---|---|---|---|
| 8% | $44.73 | $47.57 | $50.98 |
| 9% | $37.36 | $39.26 | $41.47 |
| 10% | $31.86 | $33.18 | $34.70 |
Read it as a range, not nine answers. Every cell sits above $30, so the market is assuming lower growth or a higher discount rate. Cutting growth to 4% for years 1–5 and 3% for years 6–10 gives $30.19, almost exactly the price. The sharper question is whether 4% then 3% is more likely than 8% then 5%. The reverse DCF calculator solves for that growth directly.
Choosing DCF calculator inputs sensibly
- Normalize free cash flow. A single year can be inflated by a working-capital release or depressed by a plant build; a three-year average is often a better start. Subtract stock-based compensation, a real cost to owners.
- Tie growth to evidence. Compare the first-stage rate with five years of free cash flow and revenue growth and with consensus. Growth tends to slow as companies get larger, which is why the second stage exists.
- Keep terminal growth low. It must stay below the discount rate, and as the gap narrows the terminal value balloons. At the defaults the terminal value is already 15.8 times year-10 free cash flow.
- Be consistent with the discount rate. Use a higher rate for more debt or less predictable cash flow, and the same method for every company.
- Use the diluted share count. If it has risen every year, value per share will keep eroding even when the business grows.
Cross-check the answer against peers' multiples, as explained in what makes a good P/E ratio.
Limitations, and when to use the Stock Analyzer
This intrinsic value calculator is deliberately simple, so it cannot:
- value companies with negative or near-zero free cash flow, because growing a loss produces a bigger loss;
- separate revenue, margins and reinvestment, so it cannot show which lever drives value;
- handle banks and insurers, or cyclicals at a peak without a normalized starting figure;
- show more than one scenario at a time.
For a real company, the Stock Analyzer loads its reported financials, builds bear, base and bull scenarios and runs stress tests, so the inputs come from the filings rather than memory.
Value a real company in the Stock Analyzer
Load a company's reported financials, build bear, base and bull scenarios, and stress-test the assumptions behind your value.
Frequently asked questions
What is a stock valuation calculator?
A stock valuation calculator turns a few assumptions into an estimate of what one share is worth. This one uses a discounted cash flow model: it forecasts ten years of free cash flow, adds a terminal value, discounts everything to today, subtracts net debt and divides by diluted shares. The output is an estimate under your inputs, not a price target.
How do I calculate intrinsic value per share?
Forecast free cash flow, discount each year at your required return, and add the discounted terminal value to get enterprise value. Subtract net debt to get equity value, then divide by diluted shares. With this calculator's defaults that gives $39.26 per share. Change the growth, discount rate or terminal growth to see how sensitive the estimate is.
What discount rate should I use in a DCF calculator?
Most investors use the weighted average cost of capital or a personal hurdle rate, set higher for riskier, more indebted or more cyclical businesses. One percentage point matters: at the defaults, moving from 9% to 10% cuts the value from $39.26 to $33.18 a share. Use the same approach for every company you compare.
Why is terminal value such a large part of a DCF?
Because it captures every year after the forecast. Even with ten explicit years, the defaults put 57.8% of enterprise value in the terminal value. The share rises with higher terminal growth, a lower discount rate or a shorter forecast. When it approaches 80% or more, test the terminal assumptions harder than the near-term forecast.
Can I value a company with negative free cash flow?
Not meaningfully. Growing a negative figure produces a more negative one, so the value comes out below zero. For early-stage or loss-making companies, forecast revenue growth and the operating margin the business should reach at maturity, derive free cash flow from those, and value that path instead of today's negative figure.