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Free DCF Calculator: Find Your Stock's True Value in 2 Minutes
Enter a ticker — get intrinsic value per share, margin of safety, and a sensitivity table. Free, no signup.
Project cash flows forward → find intrinsic value
Your inputs
One set of assumptions
Model settings
Results update live as you adjust.
Results appear as you type
Search a ticker to auto-fill live data, or load an example. Drag the sliders to see how assumptions drive the outcome.
Quick start: Alphabet (GOOGL)
FCF $69B · Growth 12% · Discount 9% · Shares 12.3B → ~$185/share
What Is a DCF Model?
A discounted cash flow model answers a single question: what should you pay today for all the cash a business will generate in the future? You project the company's free cash flows for 5 to 10 years, discount each year back to today using the weighted average cost of capital, then add a terminal value to capture all cash flows beyond the explicit forecast horizon. The result is intrinsic value — what the business is worth on its own merits, independent of what the market currently believes.
Analysts use DCF because it forces you to defend every assumption. Unlike a P/E multiple, you can't hide behind “the sector trades at 20×” — you have to specify growth rates, margins, capital intensity, and cost of capital, and the math will punish sloppy thinking. Use DCF for mature businesses with predictable free cash flow; use multiples (P/E, EV/EBITDA, P/S) when cash flows are volatile or you need a quick peer comparison. The two methods answer different questions, and the strongest theses survive both tests. For deeper methodology, see the discounted cash flow guide.
How to Read Your DCF Results
The calculator outputs three numbers that matter: intrinsic value per share, current price, and margin of safety. If intrinsic value sits well above the current price, the stock looks undervalued under your assumptions. If it sits below, the market is paying more than your model justifies. A positive margin of safety means you're buying with a buffer; a negative one means you'd need to be precisely right on every input just to break even — and you won't be.
Then look at the sensitivity table. It shows intrinsic value across a grid of growth rates and discount rates. Your base case is highlighted, but the surrounding cells are where the real insight lives. If your fair value swings more than 40% on a single percentage point of WACC change, your model is too sensitive — tighten the cost of capital first, since that's almost always the dominant lever. A robust thesis is one where the stock looks cheap across multiple cells, not just the optimistic corner. Single-point estimates lie. The grid forces honesty.
DCF Calculator Assumptions Explained
Each input drives the output, and most retail mistakes come from sloppy assumptions. Revenue growth should fall between two anchors: the historical 5-year revenue CAGR as a floor and analyst consensus as the ceiling — assuming a high-growth phase will last forever is the most common error. FCF margin should reflect the trailing 5-year average, not the most recent quarter, because peak margins rarely persist. Use the free cash flow calculator to back out a clean number from operating cash flow minus capex.
Terminal growth rate must be capped at 2–3%. Long-run nominal GDP grows around 2.5%; assuming anything above 4% means the company eventually exceeds the size of the global economy. WACC typically lives between 7–9% for stable, large-cap businesses, 10–12% for growth companies, and 12%+ for speculative or pre-profit names. Use the WACC calculator to derive a defensible number from the company's actual capital structure rather than guessing. The single most common mistake: setting terminal growth equal to or above WACC, which makes terminal value mathematically infinite. Don't do that.
When DCF Analysis Breaks Down
DCF is the wrong tool for several real-world cases. Pre-revenue companies have no cash flows to discount; the entire valuation collapses into terminal value, which is just speculation in a fancier package — use revenue-multiple comps instead. Cyclical businesses at peak or trough trade on normalized earnings, not current ones; applying DCF to a steel company with peak FCF will overstate value by 50%+ when the cycle turns. Businesses with negative free cash flow can't be DCF'd directly — switch to EV/Sales or P/B until cash flow stabilizes.
Regulated utilities are better valued with a dividend discount model, since their returns are essentially capped by rate-of-return regulation and the dividend stream is the cleanest proxy for shareholder cash. High-growth companies where terminal value exceeds 70% of total intrinsic value are also a red flag — at that point you're not really valuing the explicit forecast, you're guessing about year 11+ and calling it analysis. When DCF breaks down, fall back to multiples and triangulate. The discounted cash flow guide walks through these edge cases in depth.
How to use this DCF calculator
Find free cash flow
Free cash flow = operating cash flow − capital expenditures. Both are on the cash flow statement in any 10-Q or 10-K. Use trailing twelve months (TTM). If FCF has been lumpy, use a 3-year average.
Set a realistic growth rate
Anchor to recent 3–5 year FCF growth, then apply a 20–30% discount for conservatism. Use the "Load example" presets (AAPL, GOOGL, MSFT) to see how reasonable assumptions look for large-cap companies.
Choose your discount rate
8–10% for large-cap US equities. 11–13% for smaller or riskier businesses. This is your required return — the minimum you'd accept to own this business instead of a risk-free alternative.
Read the sensitivity table, not the point estimate
Any single DCF number is a point estimate with false precision. The table matters: if the stock looks cheap across multiple growth/discount combinations, your thesis is robust. If it only works under optimistic assumptions, that's a warning.
Reverse DCF: what is the market pricing in?
How reverse DCF works
A standard DCF projects cash flows forward to find intrinsic value. A reverse DCF does the opposite — it starts from the current stock price and solves backwards for the growth rate the market is implicitly assuming.
The question it answers: “What annual FCF growth rate would make the intrinsic value equal to today's market price?” If the implied growth rate is higher than what you think the business can realistically deliver, the stock may be overvalued. If it's lower, there may be upside.
Worked example: Apple reverse DCF
Suppose AAPL trades at $211/share with 15.2B diluted shares, giving a ~$3.2T market cap. TTM FCF is $110B. Using a 9% discount rate, 2.5% terminal growth, and 10-year projection:
The reverse DCF solves for the growth rate G where: $3.2T = Σ($110B × (1+G)ᵗ / 1.09ᵗ) + terminal value. The answer: roughly 8% annual FCF growth. Apple's historical FCF CAGR is ~7–9%, so the market is pricing in continuation of recent trends — not acceleration. This suggests the stock is priced for what Apple has already demonstrated, leaving room for upside if growth accelerates.
The DCF model explained
What is a DCF model?
A DCF (discounted cash flow) model answers one question: what should you pay today for all the cash a business will generate in the future? You estimate future free cash flows, then discount them back to today using a required rate of return. The result is intrinsic value — what the business is actually worth, independent of what the market currently says.
The model has three inputs that matter most: how fast the business grows (growth rate), how long that growth lasts (projection period), and what you demand for holding the risk (discount rate). Small changes in these assumptions create large changes in intrinsic value — which is exactly why the sensitivity table is more useful than any single output number.
How to choose your growth rate
Use the company's recent 3–5 year revenue or FCF growth as your base. Then ask: is this sustainable? High-growth rates (20%+) rarely persist for more than 5–7 years. The law of large numbers works against every growing business eventually.
A conservative approach: use the recent rate for years 1–3, then step it down by 30–50% for years 4–5. For the terminal growth rate (after year 5), use 2–3% — roughly in line with long-run nominal GDP growth. Using anything above 4% assumes the company will eventually be larger than the entire global economy. That's not a model — it's wishful thinking.
What discount rate should you use?
The discount rate is your required return — the minimum you'd accept to own this business instead of something risk-free. For most publicly traded US companies, 8–12% is the reasonable range. Use 9–10% as a starting point for large-cap, stable businesses.
Apply a higher rate (11–13%) for smaller, more volatile, or capital-intensive companies. The 10-year Treasury yield (~4.5%) plus a 4–5% equity risk premium gives a rough WACC approximation. But don't obsess over getting WACC precisely right — use the sensitivity table to understand how your conclusion holds across a range of discount rates.
Why terminal value dominates the result
In a typical 5-year DCF, terminal value represents 65–75% of total intrinsic value. This is mathematically unavoidable: you're capturing all cash flows from year 6 to infinity. The terminal value equation — FCF × (1 + g) / (r − g) — is extremely sensitive to the spread between your discount rate and terminal growth rate.
When r − g shrinks (say discount rate drops or terminal growth rises), terminal value explodes upward. This is why Warren Buffett and Charlie Munger don't use precise DCF models. They look for businesses that are obviously cheap across a wide range of assumptions — what Munger called "no-brainer" investments. The sensitivity table forces the same discipline.
Margin of safety: the most important output
Margin of safety is the gap between intrinsic value and current market price. Benjamin Graham introduced the concept in The Intelligent Investor: even if your DCF assumptions are directionally correct, you need a buffer against estimation error. Graham required a 33–50% margin of safety. Modern practitioners use 20–30% as a minimum.
Think of it this way: if your DCF says a stock is worth $100 and you buy it at $80 (20% margin), you're protected against being 20% wrong in your assumptions and still not losing money. The margin of safety bar in this calculator shows exactly where you stand — and calls out when you'd need to be precisely right to break even.
When DCF works — and when it doesn't
DCF works best for mature businesses with predictable, positive free cash flow: consumer staples, industrials, software companies with established revenue, utilities. Apple is the classic example — stable FCF, predictable growth, easy to model.
DCF works poorly for: pre-revenue companies (nothing to discount), banks and insurers (capital is a product, not an expense), turnarounds with negative FCF, and hyper-growth companies where the terminal value assumption does virtually all the work. For these, use relative valuation (EV/EBITDA, P/S, P/B) instead — or combine both methods and triangulate.
Frequently asked questions
What is the DCF formula?
Intrinsic Value = Σ [FCFₜ / (1 + r)ᵗ] + Terminal Value / (1 + r)ⁿ. FCFₜ is free cash flow in year t, r is your discount rate, n is the projection period. Terminal Value = FCF_final × (1 + g) / (r − g), where g is the long-run growth rate.
Where do I find free cash flow?
On the cash flow statement: Operating Cash Flow minus Capital Expenditures. Both are in the company's 10-K (annual) or 10-Q (quarterly) filing. Use trailing twelve months (TTM) for the most current number.
Why does my intrinsic value change so much when I adjust the discount rate?
The DCF formula uses (1 + r)ᵗ in the denominator — a small change in r compounds across 5+ years and the terminal value calculation. A 1% increase in discount rate can reduce intrinsic value by 10–20%. This is why the sensitivity table matters more than any single estimate.
What is a good margin of safety?
Most value investors target 20–30%. Benjamin Graham required 33–50%. The right margin depends on how confident you are in your assumptions — less predictable businesses warrant a wider buffer.
What shares outstanding should I enter?
Use diluted shares outstanding — this includes options, warrants, and convertible securities. Find it in the earnings release or the 10-K cover page. It's usually in millions (M) or billions (B) for large companies.
Can I use this calculator for any stock?
For any stock with positive, relatively predictable free cash flow: yes. It works best for mature companies. For banks, pre-revenue companies, and businesses with negative FCF, DCF is less reliable — use P/B or EV/EBITDA instead.
What is a reverse DCF?
A reverse DCF works backwards from the current stock price to find the growth rate the market implies. Instead of projecting cash flows to find intrinsic value, it asks: what growth rate makes intrinsic value equal today's price? This tells you what needs to be true for the stock to be fairly valued — and whether those expectations are realistic.
How do you calculate implied growth rate?
Start with the current stock price × shares outstanding = market cap. Then use binary search to find the annual FCF growth rate where your DCF model's intrinsic value equals the market cap — holding discount rate and terminal growth constant. If the implied growth rate is higher than the company's recent FCF growth, the market may be pricing in acceleration you don't expect.
What is WACC?
Weighted Average Cost of Capital — the blended required return across all capital sources (debt and equity). For most equity-only analyses, WACC approximates your equity required return: 10-year Treasury yield (~4.5%) plus an equity risk premium of 4–5% = roughly 8.5–9.5%.
Why is the terminal value such a large percentage of total value?
Because it captures all cash flows from year 6 to infinity. In a 5-year DCF, terminal value typically represents 65–75% of total intrinsic value. This is mathematically normal — it's not a problem with the model. It does mean your terminal growth rate assumption is extremely important.