DCF Calculator
Estimate a stock's intrinsic value using the Discounted Cash Flow (DCF) method. Enter a company's free cash flow and shares outstanding, then adjust the growth assumptions to see how they affect fair value per share.
Enter Company Data
Find these numbers on any financial data site or the company's annual report (10-K filing).
DCF Fair Value per Share
Enter a current stock price above to see if it's over or undervalued
View 10-year cash flow projections
| Year | Projected FCF | Present Value |
|---|---|---|
| Year 1 | $55.00B | $50.00B |
| Year 2 | $60.50B | $50.00B |
| Year 3 | $66.55B | $50.00B |
| Year 4 | $73.21B | $50.00B |
| Year 5 | $80.53B | $50.00B |
| Year 6 | $88.58B | $50.00B |
| Year 7 | $97.44B | $50.00B |
| Year 8 | $107.18B | $50.00B |
| Year 9 | $117.90B | $50.00B |
| Year 10 | $129.69B | $50.00B |
| Terminal Value | $1.77T | $683.33B |
Calculation Breakdown
Enterprise Value
$1.18T
Per Share (no margin)
$78.89
Margin of Safety
25.0%
Fair Value (with margin)
$59.17
How DCF Valuation Works
The Discounted Cash Flow model is the gold standard of intrinsic value analysis. Warren Buffett has called it "the only logical approach to evaluating a business." The idea is simple: a company is worth the sum of all the cash it will generate in the future, discounted back to what that cash is worth today.
The calculation works in three steps:
- Project future cash flows: Starting from today's free cash flow (FCF), grow it at your expected growth rate for 10 years.
- Add terminal value: After year 10, assume the company grows at a modest rate (2-3%) forever. This "terminal value" captures all future cash flows beyond the projection period.
- Discount to present value: Each future dollar is worth less than a dollar today. The discount rate (your required return) converts future cash flows to today's dollars.
The result is the enterprise value, the total worth of the business. Divide by shares outstanding to get fair value per share, then apply a margin of safety to protect against estimation errors.
Want to see DCF applied to real stocks? Try our stock fair value calculator. We run this model daily on 510+ US stocks with analyst growth estimates.
DCF Calculator FAQ
What is a DCF (Discounted Cash Flow) calculator?
A DCF calculator estimates what a company is worth today by projecting its future free cash flows and discounting them back to present value. It answers the question: if I could collect all the cash this business will generate over the next 10+ years, how much would that be worth in today's dollars?
What inputs do I need for a DCF calculation?
You need six inputs: (1) Free Cash Flow, the cash the company generates after expenses, (2) Shares Outstanding, total shares issued, (3) Growth Rate, how fast cash flow will grow, (4) Discount Rate, your required annual return (typically 10%), (5) Terminal Growth Rate, long-term growth after the projection period (usually 2-3%), and (6) Margin of Safety, a buffer for estimation errors.
Where do I find a company's free cash flow?
Free cash flow is reported on the company's cash flow statement, which is part of every 10-K (annual) and 10-Q (quarterly) filing with the SEC. It's calculated as Operating Cash Flow minus Capital Expenditures. You can find it on financial data sites or the SEC's EDGAR database.
What discount rate should I use?
Most investors use 10%, which is the stock market's historical average annual return. If you want a more conservative estimate, use a higher discount rate (12-15%). The discount rate represents your opportunity cost: the return you'd expect from an alternative investment of similar risk.
What is margin of safety in DCF?
Margin of safety is a buffer that accounts for uncertainty in your projections. A 25% margin of safety means you'd only consider buying if the stock is at least 25% below your calculated fair value. Benjamin Graham popularized this concept. It protects you from overpaying due to overly optimistic assumptions.
Why does a small change in growth rate cause a big change in fair value?
DCF models are highly sensitive to the growth rate because the effect compounds over 10 years. A 1% increase in growth might seem small, but over a decade it significantly changes the projected cash flows. This sensitivity is actually a feature. It reminds you that the fair value is an estimate, not a precise number, which is why the margin of safety matters.
What is terminal value in DCF?
Terminal value represents the company's worth beyond the 10-year projection period. Since a business doesn't stop generating cash after year 10, terminal value captures all future cash flows in perpetuity, growing at a modest rate (2-3%). It typically accounts for 60-80% of the total DCF value, which is why using a conservative terminal growth rate is important.