DCF fair value calculator
Earnings, growth and an exit multiple. See the price path and the annual return your assumptions actually imply.
Cash the business throws off What it is worth to you today
Fair value
£2389m
Market says
£1600m
Undervalued by
+49%
Nudge the discount rate by one point and watch fair value swing. That sensitivity is the honest reason two smart people can value the same company very differently.
The thing most people get wrong
Run it backwards. Instead of asking what the company is worth, put in today's price and solve for the growth it assumes. Now you have one checkable claim you can argue with, rather than a fair value quoted to two decimal places that nobody can defend.
How to use it properly
- 1Enter the company's current earnings per share.
- 2Set a growth rate you would defend out loud. High growth mean-reverts, and it is the least persistent statistic in finance.
- 3Set an exit multiple. If you need 40x to make the numbers work, the numbers do not work.
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