8/11/2023 0 Comments Dcf calculator![]() The output also includes a color scale with five valuation zones: Significantly undervalued in dark green, Slightly undervalued in light green, Fair value in yellow, Slightly overvalued in orange, and Significantly overvalued in red. The block will be green if the margin of safety is positive or green if the margin of safety is negative. The Fair Value section gives you the fair value of the stock based on the prescribed parameters and margin of safety. You can save DCF calculator parameters by clicking the stacked radio buttons and then clicking the Save Parameters item in the drop-down menu. Ensure that the terminal-stage growth rate is less than the relaxation rate for convergence of the DCF calculation. You can change the values to consider a longer/shorter terminal-phase duration or a faster/slower rate of terminal development. Terminal-stage growth rate and years: The default value is 10 years at a growth rate of 4%. You can change the values to consider longer/shorter growth periods or faster/slower growth rates. Growth-Stage Growth Rate and Years: The default value for the 10-year earnings growth rate is 10 years. If you want to add a specific value to the intrinsic value of the stock, you can add that value by entering it in this cell. Tangible Book Value: The default value equals the tangible book value of the company per share. You can change the discount rate by entering the desired value or by pressing the plus or minus button. You can also enter your base value in the cell provided.ĭiscount Rate %: The default value is equal to the 10-year Treasury fixed maturity rate plus a 6% equity risk premium. If you want to do Free Cash Flow valuation, you can switch the calculator to FCF mode. ![]() You can substitute a stock price to calculate the margin of safety given a target stock price.īased on Earnings or Free Cash Flow: The GuruFocus DCF Calculator uses Earnings Per Share as the default method. Stock Price: The default value is the current price of the stock. To set the parameters for the DCF Calculator, simply change the values in the cells provided: Apple’s fair value based on the DCF earnings model is $148.55. Based on the same discount rate, the present value of the terminal phase cash flows is $70.30. ![]() Based on a 10% discount rate, the present value of the growth-stage cash flows is $78.26.ĭuring the terminal phase, consider a 4% increase in income over 10 years. (NASDAQ: AAPL) earnings per share of $6.11, with 10-year earnings growth of 14.9%. You can also click on the DCF tab from the company’s stock summary page. Users can access the DCF calculator by clicking on DCF calculator under Tools tab. ![]() Try GuruFocus’s Better DCF Calculator pageīy default, the terminal phase growth rate is 4%, while the discount rate is equal to the 10-year Treasury fixed maturity rate plus a 6% equity risk premium. The parameters of the model include earnings per share, 10-year earnings per share growth rate, discount rate, terminal stage growth rate and tangible book value per share. The GuruFocus DCF Calculator considers two 10-year phases: Growth Phase and Terminal Phase. A discounted cash flow model values stocks based on projected cash flows over the next 10 to 20 years. ![]()
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