Discounted Cash Flow (DCF) Stock Valuation Calculator
Determine the intrinsic fair value of a stock. Project free cash flows, select a discount rate (WACC), factor in net debt, and evaluate sensitivity scenarios.
Valuation Sensitivity Matrix (WACC vs. Growth)
Analyze how the intrinsic share price changes based on different combinations of the discount rate (WACC, vertical axis) and growth rate (horizontal axis). The highlighted cell indicates your base case.
| WACC \ Growth | 6.0% | 7.0% | 8.0% | 9.0% | 10.0% |
|---|---|---|---|---|---|
| 7.0% | $73.59 | $79.94 | $86.82 | $94.25 | $102.28 |
| 8.0% | $59.24 | $64.21 | $69.59 | $75.40 | $81.67 |
| 9.0% | $49.33 | $53.37 | $57.72 | $62.42 | $67.49 |
| 10.0% | $42.10 | $45.45 | $49.07 | $52.97 | $57.17 |
| 11.0% | $36.59 | $39.43 | $42.49 | $45.79 | $49.33 |
Projected Cash Flow Discount Table
| Year | Projected FCF ($M) | Discount Factor (1 + WACC)^t | Discounted Present Value ($M) |
|---|---|---|---|
| 1 | $540.00 | 1.0900 | $495.41 |
| 2 | $583.20 | 1.1881 | $490.87 |
| 3 | $629.86 | 1.2950 | $486.36 |
| 4 | $680.24 | 1.4116 | $481.90 |
| 5 | $734.66 | 1.5386 | $477.48 |
| 6 | $793.44 | 1.6771 | $473.10 |
| 7 | $856.91 | 1.8280 | $468.76 |
| 8 | $925.47 | 1.9926 | $464.46 |
| 9 | $999.50 | 2.1719 | $460.20 |
| 10 | $1,079.46 | 2.3674 | $455.98 |
How Intrinsic Value is Calculated
The DCF model projects free cash flows over a growth stage, sums their discounted present values, adds the present value of the terminal value, and subtracts net debt to find equity value:
For example, with a company generating $500M in FCF growing at 8% for 10 years and discounted at a 9% WACC: the Enterprise Value is $11,944.93. Adjusting for $400M in net debt yields an intrinsic stock price of $57.72 per share (with 200M shares).
Frequently asked questions
What is a Discounted Cash Flow (DCF) valuation?
A DCF valuation is a method used to estimate the value of an investment based on its expected future cash flows. By discounting future cash flows back to the present value using a discount rate (WACC), investors determine if a stock is under- or over-valued.
What is WACC in a DCF model?
Weighted Average Cost of Capital (WACC) represents a company's average cost of capital from all sources (debt and equity). In a DCF model, WACC acts as the discount rate because it represents the minimum required return investors expect for taking on the risk of the stock.
What is perpetual terminal growth?
Terminal growth rate is the constant rate at which a company's free cash flows are expected to grow forever after the initial growth stage. It is usually set to average GDP growth, around 2% to 3%, to avoid assuming the company grows larger than the economy.