DCF Calculator
Estimate a stock's intrinsic value using Discounted Cash Flow analysis
Free valuation tool by Money365.Market
Frequently Asked Questions
What is a DCF Calculator?
A Discounted Cash Flow (DCF) calculator is a fundamental valuation tool used by investors and analysts to estimate the intrinsic value of a stock or business. It works by projecting future free cash flows and discounting them back to their present value using an appropriate discount rate (typically the Weighted Average Cost of Capital or WACC).
How does DCF valuation work?
The DCF model is based on the principle that money today is worth more than the same amount in the future (time value of money). The calculation involves three main components:
- Projected Cash Flows: Estimate future free cash flows for typically 5-10 years
- Terminal Value: Estimate the company's value beyond the projection period
- Discount Rate: The rate used to discount future cash flows to present value
What is the DCF formula?
The basic DCF formula is:
Where FCF is Free Cash Flow, r is the discount rate, and n is the number of years. The terminal value captures all cash flows beyond year 10 using the Gordon Growth Model.
When should I use DCF analysis?
DCF analysis works best for:
- Companies with predictable, positive free cash flows
- Stable, mature businesses
- Long-term investment decisions
- Comparing intrinsic value to market price
It is less suitable for pre-revenue startups, highly cyclical businesses, or companies with negative free cash flow.
What are the limitations of DCF?
- Highly sensitive to input assumptions (small changes = big value swings)
- Terminal value often accounts for 60-80% of total value
- Difficult to apply to unprofitable or high-growth companies
- Requires accurate forecasting of future cash flows
- Different analysts can arrive at very different values using the same data
PROWhat is Sensitivity Analysis in DCF?
Sensitivity analysis tests how changes in key assumptions affect the final valuation. Since DCF is highly dependent on growth rate and discount rate inputs, even small changes can dramatically alter the fair value.
Our PRO Sensitivity Matrix shows a 5×5 grid of fair values across different growth rate and discount rate combinations, so you can see the full range of possible outcomes at a glance — the same tool used by investment banks and equity research analysts.
The 3-Scenario Builder lets you define Bull, Base, and Bear cases with custom assumptions, then calculates a probability-weighted fair value — a single number that reflects your confidence across all three outcomes.
Where can I find the data I need?
- Free Cash Flow: Yahoo Finance → Financials → Cash Flow Statement → Free Cash Flow (TTM)
- Shares Outstanding: Yahoo Finance → Statistics → Shares Outstanding
- Net Cash: Balance Sheet → Total Cash minus Total Debt
- Growth Estimates: Yahoo Finance → Analysis → Next 5 Years (per annum)
- Discount Rate: Typically 8-12% for equities; use WACC for more precision
Disclaimer: This calculator is for educational purposes only. DCF valuation involves significant assumptions and should be used alongside other valuation methods. Always conduct thorough research before making investment decisions.
Free DCF Calculator by Money365.Market
Educational purposes only. Not financial advice.