Intrinsic Value Calculator - Estimate a Stock's True Worth
Estimate a stock's intrinsic value per share from its cash flow or earnings, expected growth, and a discount rate — then see how that estimate compares to the market price.
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.
How do you calculate the intrinsic value of a stock?
Intrinsic value is an estimate of what a share is fundamentally worth, based on the cash a business is expected to generate rather than its current price. You calculate it by projecting a per-share cash flow or earnings figure forward at a growth rate, adding a terminal value, and discounting it all back to today — then comparing the result to the market price.
- Inputs: cash flow per share (or EPS), growth rate, discount rate, forecast years, and terminal growth.
- Output: an estimated intrinsic value per share you can weigh against the current price.
- A larger gap between intrinsic value and price gives a bigger margin of safety.
- It is a modelled estimate, not a guaranteed value — test a range of assumptions, not one number.
Pulls the latest real market price (US-listed) into the Current market price field. Cash flow and growth assumptions are still yours to enter.
- Estimated intrinsic value per share$86.01
This is an educational estimate. Small changes in growth or discount rate can move the result significantly — test a range of scenarios.
Stress-test the result
Change one assumption at a time. The bars show direction, not a forecast.
What it is
Intrinsic value is an estimate of what a share is fundamentally worth, based on the cash a business is expected to generate rather than its current market price. This calculator projects a per-share cash flow or earnings figure forward, adds a terminal value, and discounts everything back to today to produce an estimated intrinsic value per share. It is an educational model, not a price target.
Interactive demo: how the analysis flows
Illustrative numbers only — not real data or advice.
Who it is for
- Long-term investors who want a value reference point separate from market price.
- Anyone learning how growth and discount-rate assumptions drive a valuation.
- Students and analysts practicing per-share valuation on a single, simple model.
Inputs and outputs
Inputs
- Cash flow per share or EPS
- The most recent annual free cash flow per share, or earnings per share.
- Growth rate
- Expected annual growth of that per-share figure during the forecast.
- Discount rate
- The required return used to discount future per-share cash flows.
- Forecast years
- How many years you explicitly project (commonly 5–10).
- Terminal growth rate
- Perpetual growth after the forecast period (usually low).
- Current market price (optional)
- Used only to show the gap between estimate and price.
Outputs
- Estimated intrinsic value per share
- The discounted per-share value implied by your inputs.
- Valuation gap vs current price
- How far the current price sits from the estimate, in percent (only if price provided).
- Scenario direction
- Whether the price is above or below the estimate — shown as a neutral scenario, not advice.
- Sensitivity note
- A reminder that the estimate is highly sensitive to its assumptions.
Example workflow
- Enter cash flow per share of $5 with an 8% growth rate.
- Use a 10% discount rate over a 5-year forecast.
- Set a 2.5% terminal growth rate.
- Optionally enter a current market price to see the valuation gap.
- Read the estimated intrinsic value per share and treat it as one scenario among several.
The output is an educational estimate. Re-run it with different growth and discount-rate assumptions to see a realistic range rather than a single number.
Common mistakes
- Treating the estimate as a precise target instead of a range of scenarios.
- Using a discount rate at or below the terminal growth rate, which breaks the math.
- Assuming high growth continues indefinitely far into the future.
- Setting a terminal growth rate above long-run economic growth.
- Ignoring how sensitive the result is to small changes in assumptions.
You don't need a scale to know a man is fat
In the brutal 1973–74 bear market, the entire Washington Post Company — the newspaper, Newsweek magazine and several TV stations — traded for around $100 million. Buffett conservatively reckoned the assets were worth at least $400 million. No precise model was needed: the gap between price and value was visible from across the street.
He invested about $10.6 million, then watched the stock fall further and did nothing but wait. Decades later the position was worth more than $1 billion, plus a stream of dividends along the way — a return of roughly one hundred times. As Buffett put it: you don't need to know a man's exact weight to know that he's fat.
The point of comparing price with value is to spot obvious gaps — not to manufacture false precision.
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.
The exception that beat all the rules
In 1948, Graham-Newman put about $712,000 — close to a quarter of the fund — into GEICO, an insurer that sold directly to careful drivers by mail and skipped the agent entirely. The position broke Graham's own diversification rules, and regulators even forced the fund to distribute the shares to its investors.
Those who kept the shares watched them grow more than two hundred-fold. Graham, the great apostle of wide diversification and statistical bargains, admitted in his memoirs that this single decision earned more than all the profits from twenty years of his diversified operations combined.
Even the father of quantitative bargains conceded: one outstanding business, deeply understood, can outweigh a career of small edges.
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Frequently asked questions
What is intrinsic value?
Intrinsic value is an estimate of what a share is fundamentally worth based on the cash a business is expected to generate, independent of its current market price. It is a modelled estimate, not a guaranteed value.
How is intrinsic value calculated?
One common approach projects a per-share cash flow or earnings figure forward by a growth rate, adds a terminal value for the years beyond, and discounts everything back to today using a discount rate.
Is intrinsic value the same as a fair price?
They are related but not identical. Intrinsic value is your own modelled estimate from your assumptions; a fair price is a broader market concept. Different assumptions produce different intrinsic value estimates.
What discount rate should I use?
Many investors use a required return such as the weighted average cost of capital. A higher discount rate lowers the estimated value because future cash flows are worth less today.
Why does the estimate change so much?
Per-share valuation is highly sensitive to its inputs. Small changes in growth, discount rate, or terminal growth can move the result significantly, which is why testing a range of scenarios matters.
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