This free stock valuation calculator estimates a company's intrinsic value per share with a discounted cash flow (DCF) model: ten years of free cash flow in two growth phases, plus a Gordon growth terminal value, minus net debt. Compare the result with the share price to get a discount or a premium — and keep a margin of safety.
How the model works
- Enterprise value = sum of discounted free cash flows over 10 years + discounted terminal value.
- Terminal value = FCF in year 10 × (1 + g) ÷ (r − g), where r is the discount rate and g the perpetual growth rate.
- Equity value per share = (enterprise value − net debt) ÷ shares outstanding.
- Margin of safety = (intrinsic value − price) ÷ intrinsic value.
All amounts can be entered in any currency, as long as you stay consistent (millions for cash flows, debt and shares; the share price in the same currency).
Choosing your inputs
| Input | Where to find it | Typical range |
|---|---|---|
| Free cash flow | Cash flow statement: operating cash flow − capital expenditure, ideally averaged over several years | Normalized, not a peak year |
| Growth, years 1-5 | Revenue and earnings history, guidance, industry growth | 0-15% for most mature companies |
| Growth, years 6-10 | Fade toward long-term economic growth | Lower than years 1-5 |
| Discount rate (WACC) | Weighted average cost of capital | 6-10% for large caps |
| Terminal growth | Long-term nominal GDP growth | 1.5-3% |
| Net debt | Balance sheet: financial debt − cash | Negative if net cash |
Three valuation methods to cross-check
A DCF is only one view. Compare it with multiples (P/E, EV/EBITDA versus peers) and with the free cash flow yield (FCF ÷ market cap versus bond yields). When the three point to the same range, the estimate is more robust; when they diverge, the gap tells you which assumption to question.
Common mistakes
- Starting from an exceptional year of free cash flow.
- Terminal growth above long-term GDP growth: no company outgrows the economy forever.
- Ignoring the terminal value weight: when it exceeds 75% of the total, the result depends mostly on assumptions far in the future.
- Using a single point estimate: run a low, base and high case.