DCF Stock Valuation Calculator
Estimate a stock's intrinsic value per share with a simple two-stage discounted cash flow model: project free cash flow, add a terminal value, discount to today. Educational. Runs in your browser.
Must be below the discount rate.
Use a negative number for net cash.
Two-stage DCF: free cash flow is grown for the projection years and discounted to present value, then a Gordon-growth terminal value (FCFN × (1 + gt) ÷ (WACC − gt)) captures everything after. Their sum is enterprise value; subtracting net debt gives equity value, divided by shares for the per-share figure. When the terminal value share is high (often 60–80%), the result is very sensitive to the discount and terminal-growth assumptions. Educational only — not investment advice. Everything runs in your browser.
About this tool
A discounted cash flow (DCF) model estimates what a business is worth today by projecting the cash it will generate and discounting those future dollars back to the present. This intro tool runs the standard two-stage version. In stage one it grows the company's current free cash flow at your chosen rate for a set number of years and discounts each year's figure by the discount rate (typically the weighted average cost of capital, or WACC). In stage two it applies the Gordon growth model to capture all cash flows beyond the projection horizon: terminal value = FCF in the final year × (1 + terminal growth) ÷ (WACC − terminal growth), which is then discounted back to today. Summing the present value of the projected cash flows and the present value of the terminal value gives enterprise value; subtracting net debt (total debt minus cash) yields equity value, and dividing by shares outstanding gives intrinsic value per share. Compare that figure to the market price to gauge whether a stock looks cheap or expensive on your assumptions. The big caveat the tool surfaces is sensitivity: the terminal value often makes up 60–80% of the total, so small changes in the discount rate or terminal growth swing the answer dramatically — which is why analysts run ranges, not single points. This is educational, not investment advice. Everything runs in your browser; nothing is uploaded.
How to use it
- Enter the company's current annual free cash flow (any unit — millions is typical).
- Set a growth rate for the projection years and the discount rate (WACC).
- Set a terminal growth rate below the discount rate (often near long-run GDP or inflation, ~2–3%).
- Enter net debt (debt minus cash) and shares outstanding.
- Read the intrinsic value per share and compare it to the market price.
Frequently asked questions
- What is a DCF and what does it tell me?
- Discounted cash flow estimates intrinsic value by projecting a company's future free cash flow and discounting it to present value. The per-share result is an estimate of what the stock is worth on your assumptions — compare it to the market price to judge over- or under-valuation.
- How is the terminal value calculated?
- With the Gordon growth model: terminal value = final-year FCF × (1 + terminal growth) ÷ (discount rate − terminal growth). It values all cash flows after the explicit projection as a growing perpetuity, then this calculator discounts it back to today.
- What discount rate should I use?
- Most DCFs use the weighted average cost of capital (WACC), commonly 7–12% for established companies. A higher discount rate lowers the valuation. There is no single correct number — it reflects the riskiness of the cash flows.
- Why must terminal growth be below the discount rate?
- The Gordon formula divides by (discount rate − terminal growth). If terminal growth equals or exceeds the discount rate, the denominator is zero or negative and the terminal value is infinite or nonsensical, so the calculator requires terminal growth to stay below it.
- Why is the result so sensitive to my inputs?
- Because the terminal value usually accounts for the majority of total value, small changes in discount rate or terminal growth move the answer a lot. Professionals run a range of scenarios rather than relying on one point estimate.
- Is this investment advice?
- No. This is an educational model with simplifying assumptions. Real valuations require detailed financials and judgment. Nothing is uploaded; all math runs in your browser.