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Intrinsic Value Calculator

Calculate the fundamental intrinsic value of a company based on future cash flows.

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Calculation Parameters

Specify your inputs below.

Calculated Result

Fair Intrinsic Value $115.18
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Expert Tip

Benjamin Graham's formula uses a base P/E of 8.5 for no-growth firms, scaling up based on earnings growth.

How this Calculator Works

This calculator estimates the intrinsic value of a stock using discounted cash flow (DCF) or capitalization models. By comparing intrinsic value to the market price, investors determine if a stock is overvalued or undervalued.

Formula & Methodology

Intrinsic Value = Sum [ CF_t / (1 + r)^t ] - CF_t is the projected cash flow for year t. - r is the required rate of return or discount rate. - t is the year of the cash flow.

Step-by-Step Calculation Example

Here is a step-by-step example showing how the calculations are performed:

A company is projected to generate $1,000 next year, with cash flows discounted at a required rate of 8%. 1. Calculate present value of next year's cash flow: $1,000 / (1 + 0.08)^1 = $925.93. Result: The intrinsic value based on this single-period estimate is $925.93.

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Market Capitalization Calculator

Calculate company market capitalization (market value of equity) based on share price and shares outstanding.

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Margin of Safety Calculator

Calculate the Margin of Safety to compare intrinsic values with current stock market prices.

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Detailed Insights & Expert Guide

ℹ️ About this Calculation

This equity research and valuation calculator evaluates corporate fundamentals, stock price multiples, cost of capital, dividend discount models, and shareholder return metrics based on SEC financial reporting and Wall Street equity analysis standards.

Variable Glossary

Input

Equity Inputs

Share price, earnings per share (EPS), dividend amount, book value, debt/equity ratio, or systematic beta coefficient.

Parameter

Valuation Output

Price-to-Earnings (P/E), EV/EBITDA multiple, Intrinsic Value ($), WACC %, or Return on Equity (ROE %).

How to Calculate Step-by-Step

1

Step 1

Input current stock price, shares outstanding, or balance sheet / income statement numbers.

2

Step 2

Enter expected growth rate, cost of equity, or market risk premium assumptions.

3

Step 3

Review calculated valuation multiples, margin of safety comparison, or required rate of return.

FAQ

What is WACC and why is it crucial for equity valuation?
Weighted Average Cost of Capital (WACC) represents a company's required average return on debt and equity capital. It is used as the hurdle rate to discount future cash flows in DCF valuation models.
How does stock Beta measure systematic risk?
A stock beta of 1.0 means price volatility matches the broader market index. Beta > 1.0 indicates higher volatility, while Beta < 1.0 reflects lower systematic volatility.
Should valuation multiples be evaluated in isolation?
No. Valuation ratios (P/E, EV/EBITDA, P/B) should always be benchmarked against industry peer groups, historical trading averages, and expected earnings growth (PEG ratio).