Discounted Cash Flow (DCF) is a tool that value investors use to establish a fair value for a company. This Discounted Cash Flow (DCF) calculator uses the 2-stage DCF model to analyze a company’s cash flow, assisting you in making informed investment decisions.

If you need help with how to use it or understand the various inputs, you’ll find some guidance underneath the DCF calculator.

How to Use the DCF Calculator

Once you fill in the data in all the fields the results shown below the calculator will automatically update.

Here’s a brief explanation of all inputs:

  • Initial Cash Flow (Year 0) ($): Initial free cash flow that will represent the future expected cash flows of the company.
  • Total Cash ($): Total cash and cash equivalents of the company.
  • Total Debt ($): Total short-term and long-term debt of the company.
  • Shares Outstanding: The total number of shares issued and actively held by stockholders.
  • Current Share Price ($): The amount it would cost to buy one share in a company today.
  • Expected Growth Rate (%): The rate of return during the growth stage of the investment.
  • Growth Stage Duration (years): How many years do you expect the growth stage to last?
  • Terminal Growth Rate (%): The rate of return during the terminal stage of the investment when the increase is significantly slower than the growth stage.
  • Terminal Stage Duration (years): How many years do you expect the terminal stage to last?
  • Discount Rate or Weighted Average Cost of Capital (WACC): The expected rate of return. If unsure, just use the company’s WACC.

Here’s what the results of the discounted cash flow calculator mean:

  • The summary will calculate by what percentage is the stock currently overvalued or undervalued.
  • Intrinsic Value: The fair value of a stock based on projected future cash flows.
  • Company Value: The total value of the company after the projected period.