DCF Calculator - Discounted Cash Flow Valuation
Estimate a company's intrinsic value by projecting future free cash flows and discounting them to today.
Not financial advice. This calculator is for research and educational purposes only. Outputs are estimates based on the inputs you provide and are not buy or sell recommendations. Always do your own research and consult a licensed professional before making investment decisions.
What is a DCF calculator?
A DCF (discounted cash flow) calculator estimates what a stock is worth today by projecting a company’s future free cash flows, adding a terminal value for the years beyond, and discounting it all back to the present at a chosen rate (often the WACC). The output is an intrinsic value you can compare against the market price.
- Inputs: current free cash flow, growth rate, forecast years, discount rate (WACC), and terminal growth rate.
- Output: enterprise value and an estimated intrinsic value per share.
- A stock looks undervalued when its DCF intrinsic value is meaningfully above the current price.
- DCF is highly sensitive to assumptions — always test a range of growth and discount rates rather than one number.
- Present value of forecast cash flows$473.38M
- Present value of terminal value$1,246.86M
- Enterprise value$1,720.24M
- Intrinsic value per share$3.44
- Result interpretationTerminal value is about 72.48% of enterprise value; a higher share means greater sensitivity to long-term assumptions.
Stress-test the result
Change one assumption at a time. The bars show direction, not a forecast.
What it is
A discounted cash flow (DCF) calculator estimates what a business is worth today by projecting its future free cash flows over a forecast period, adding a terminal value for the years beyond, and discounting everything back to the present using a discount rate. The result is an estimate of enterprise value, and optionally an intrinsic value per share.
Interactive demo: how the analysis flows
Illustrative numbers only — not real data or advice.
Who it is for
- Long-term investors who value businesses on fundamentals rather than price action.
- Anyone pressure-testing a thesis before committing capital.
- Students and analysts learning how valuation actually works.
Inputs and outputs
Inputs
- Current free cash flow
- The most recent annual free cash flow, in millions.
- Forecast years
- How many years you explicitly project (commonly 5–10).
- Growth rate
- Expected annual growth of free cash flow during the forecast.
- Discount rate (WACC)
- The required return used to discount future cash flows.
- Terminal growth rate
- Perpetual growth after the forecast period (usually low).
- Shares outstanding (optional)
- Used to convert equity value into per-share value.
- Net debt (optional)
- Subtracted from enterprise value to reach equity value.
Outputs
- Present value of forecast cash flows
- Discounted sum of the explicit forecast years.
- Present value of terminal value
- Discounted value of all cash flows beyond the forecast.
- Enterprise value
- Forecast PV plus terminal PV.
- Intrinsic value per share
- Equity value divided by shares outstanding (if provided).
Example workflow
- Enter current free cash flow of $100M.
- Set a 5-year forecast with an 8% annual growth rate.
- Use a 10% discount rate and a 2.5% terminal growth rate.
- Optionally add 500M shares and $0 net debt.
- Read the enterprise value and intrinsic value per share, then compare them to the current market price.
A DCF is only as good as its inputs. Treat the output as one estimate among several, and test how sensitive it is to small changes in growth and discount rate.
Common mistakes
- Using a discount rate at or below the terminal growth rate, which breaks the terminal value math.
- Projecting aggressive double-digit growth far into the future.
- Setting a terminal growth rate higher than long-run GDP growth.
- Treating a single DCF output as a precise target instead of a range.
- Forgetting to subtract net debt when calculating equity value.
A fair price for a wonderful business
In 1988, just months after the Black Monday crash, Warren Buffett quietly began buying Coca-Cola shares. By 1989 Berkshire had spent roughly $1 billion — at about 15 times earnings, hardly a statistical bargain. Wall Street was puzzled: the "cigar-butt" student of Graham was paying up for a household brand.
Buffett was not valuing the next quarter. He was estimating decades of predictable owner earnings from a product sold in nearly every country on earth, protected by the strongest brand moat in consumer goods. Ten years later the stake was worth more than $13 billion, and Berkshire still holds it today — the annual dividends alone now return a large share of the original cost every single year.
A valuation model exists to estimate long-term cash generation — not to find the statistically cheapest ticker on the screen.
A valuation done with an annual report and a weekend
Buffett read PetroChina's annual report at home and pegged the company's value at roughly $100 billion. The market was pricing it near $37 billion. He built no spreadsheet, met no management, sought no second opinion — the gap was too wide to need precision. Berkshire bought about $488 million of the Hong Kong-listed shares.
By 2007, rising oil prices and a re-rating had carried PetroChina's market value past $250 billion. Buffett sold the entire stake for about $4 billion — roughly an eight-fold return plus dividends — and moved on.
When value is triple the price, ordinary accuracy is enough. The best decisions rarely require the most elaborate models.
When the price already assumed a miracle
In 1972, institutions convinced themselves that about fifty "one-decision" growth stocks could be bought at any price and never sold. Polaroid traded above 90 times earnings, McDonald's and Disney near 80, Avon around 65. Run the arithmetic backwards and those prices quietly assumed decades of flawless, ever-accelerating growth.
The 1973–74 bear market repriced the dream: the group fell 60–90%, and Polaroid eventually went bankrupt. The cruel detail is that many of the businesses kept growing exactly as promised — the investments still failed, because the starting price had already spent the future.
Run the DCF backwards: ask what growth today's price assumes, then ask honestly whether reality can deliver it.
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Frequently asked questions
What is a DCF calculator?
A DCF calculator estimates the present value of a business by projecting its future free cash flows, adding a terminal value, and discounting everything back to today using a chosen discount rate.
What discount rate should I use?
Many investors use the weighted average cost of capital (WACC) as the discount rate. A higher discount rate lowers the estimated value, so it reflects how risky and how time-sensitive the future cash flows are.
How many forecast years are reasonable?
Five to ten years is common. Shorter forecasts rely more heavily on the terminal value, while longer forecasts require more assumptions that can compound errors.
What's a sensible terminal growth rate?
Terminal growth is usually kept low, often between 1% and 3%, and should not exceed long-run economic growth, since no company can outgrow the economy forever.
Why does DCF give such different results?
DCF is highly sensitive to its inputs. Small changes in growth, discount rate, or terminal growth can move the output significantly, which is why testing a range of scenarios matters more than a single number.
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