DCF Calculator (with Reverse DCF)

Value a stock by discounting its projected free cash flows (DCF), or run a Reverse DCF to find the growth rate the current stock price already assumes.

Current annual FCF (e.g., 1B = 1000000000)

Intrinsic Value Per Share

$358.24

Total Intrinsic Value

$35.82B

PV of FCFs

$12.87B

PV of Terminal Value

$22.95B

Terminal value represents 64.1% of total intrinsic value

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How It Works

  1. 1Choose between DCF (calculate intrinsic value) or Reverse DCF (find implied growth rate).
  2. 2Enter the company's current Free Cash Flow (FCF) and shares outstanding.
  3. 3Set your assumptions: growth rate, discount rate, terminal growth rate, and projection years.
  4. 4For Reverse DCF, enter the current stock price instead of growth rate.
  5. 5Review the calculated intrinsic value or implied growth rate to assess if the stock is fairly valued.

The formula

  • Projected FCF(t) = FCF₀ × (1 + g)^t
  • Present value(t) = Projected FCF(t) ÷ (1 + r)^t
  • Terminal value = FCF(N) × (1 + terminal growth) ÷ (r − terminal growth)
  • Intrinsic value = Σ present values + Terminal value ÷ (1 + r)^N
  • Value per share = Intrinsic value ÷ Shares outstanding

g is the FCF growth rate, r the discount rate and N the projection years. The model needs r to be higher than the terminal growth rate.

Worked example

Free cash flow $1.0B, growth 15% a year, discount rate 10%, terminal growth 3%, 10 projection years, 100 million shares.

  1. 1Present value of the ten projected cash flows: $12.87B
  2. 2Terminal value at year 10: $59.53B, discounted to today: $22.95B
  3. 3Intrinsic value: $12.87B + $22.95B = $35.82B
  4. 4Per share: $35.82B ÷ 100M = $358.24

Intrinsic value of about $358 per share. About 64% of it comes from the terminal value.

Reverse DCF with the same inputs and a $150 share price (market cap $15B) implies FCF growth of about 3.3% a year.

Frequently Asked Questions

What is DCF (Discounted Cash Flow) analysis?

DCF analysis is a valuation method that estimates the present value of an investment based on its expected future cash flows. It discounts those future cash flows back to today's value using a discount rate, typically the weighted average cost of capital (WACC) or required rate of return.

What discount rate should I use?

A common approach is to use the company's WACC (Weighted Average Cost of Capital), typically ranging from 8-12% for most companies. For riskier investments, use a higher rate (12-15%+). The S&P 500 historical return of ~10% is often used as a baseline.

How do I estimate Free Cash Flow growth rate?

Look at the company's historical FCF growth, analyst estimates, industry growth rates, and the company's competitive position. Be conservative—most companies can't sustain high growth rates (20%+) for more than 5-10 years.

Why is terminal value so important in DCF?

Terminal value often represents 60-80% of the total DCF value because it captures all cash flows beyond the projection period (in perpetuity). This is why the terminal growth rate assumption is critical—even small changes significantly impact valuation.

What is Reverse DCF and when should I use it?

Reverse DCF works backwards from the current stock price to find what growth rate is 'priced in.' Use it to check if market expectations are realistic compared to historical growth and industry benchmarks.