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DCF Valuation Calculator
Estimate intrinsic value using discounted cash flow analysis. Enter free cash flow, growth rates, WACC, and shares outstanding.
Inputs
Fair Value Per Share
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Enterprise Value
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Projected Cash Flows
| Year | FCF ($M) | PV ($M) |
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PV of Cash Flows
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PV of Terminal Value
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Saved Calculations
Understanding DCF Valuation
How DCF Works
Discounted Cash Flow analysis estimates a company's intrinsic value by projecting future free cash flows and discounting them back to present value using the Weighted Average Cost of Capital (WACC).
Intrinsic Value = Σ FCFt / (1+WACC)t + Terminal Value / (1+WACC)n
The terminal value captures all cash flows beyond the explicit forecast period using the Gordon Growth Model.
Key Assumptions to Scrutinize
- 1.Growth rates: Overly optimistic growth projections are the most common error in DCF models. Compare to historical growth and industry benchmarks.
- 2.WACC: Small changes in discount rate dramatically affect valuation. A 1% change in WACC can swing fair value 20%+ for growth stocks.
- 3.Terminal growth rate: Should not exceed long-term GDP growth (2-3%). Higher rates imply the company eventually becomes larger than the economy.
- 4.Terminal value dominance: In most DCFs, terminal value is 60-80% of total value. This means your explicit forecast period matters less than you think.