DCF Calculator
Estimate intrinsic value per share using discounted future free cash flow.
Discounted Cash Flow
Live tool| Year | Projected FCFF | Present value |
|---|---|---|
| 1 | $10.80B | $9.82B |
| 2 | $11.66B | $9.64B |
| 3 | $12.60B | $9.46B |
| 4 | $13.60B | $9.29B |
| 5 | $14.69B | $9.12B |
| Sum of PV, forecast cash flows | $47.34B | |
How it works
A discounted cash flow (DCF) model asks a simple question: if this company keeps producing cash, what is all of that future cash worth in today’s dollars? You start with the company’s base-year free cash flow, grow it for a handful of explicit forecast years, then estimate everything after that with a single “terminal value.” Because a dollar next year is worth less than a dollar today, every future cash flow is discounted back to the present using your required return.
One important detail: this calculator pairs unlevered free cash flow to the firm (FCFF) — cash flow before debt payments — with an enterprise discount rate (WACC, the weighted average cost of capital). Do not use levered free cash flow to equity here. If you enter levered screener FCF, debt may be counted twice: once through interest already reflected in the cash flow, and again when total debt is subtracted.
Adding cash and subtracting debt converts the enterprise value into equity value, and dividing by diluted shares outstanding gives an estimated intrinsic value per share. If you enter a current market price, the calculator also shows the valuation gap between your estimate and the market.
The formula
- Convert percent-number inputs to decimals: growthRateDecimal = growthRate ÷ 100, discountRateDecimal = discountRate ÷ 100, terminalGrowthRateDecimal = terminalGrowthRate ÷ 100.
- Projected FCFF in year t = freeCashFlow × (1 + growthRateDecimal)t — this grows or shrinks the base free cash flow for each forecast year.
- Present value of projected FCFF in year t = projected FCFF ÷ (1 + discountRateDecimal)t— this discounts future cash flow back to today’s dollars.
- Sum of present-value forecast cash flows = PV(year 1) + PV(year 2) + … + PV(final forecast year).
- Terminal value = final-year FCFF × (1 + terminalGrowthRateDecimal) ÷ (discountRateDecimal − terminalGrowthRateDecimal) — the Gordon Growth estimate of all cash flows after the forecast period. It is valid only when the final projected FCFF is positive and the discount rate is above terminal growth.
- Present value of terminal value = terminal value ÷ (1 + discountRateDecimal)forecastYears.
- Enterprise value = sum of PV forecast cash flows + PV of terminal value.
- Equity value = enterprise value + cash & investments − total debt.
- Intrinsic value per share = equity value ÷ diluted shares outstanding.
- Valuation gap % = (intrinsic value per share − price) ÷ price × 100, shown only when a current price is provided.
Worked example
Inputs: free cash flow = $10,000,000,000; growth rate = 8; forecast years = 5; discount rate = 10; terminal growth rate = 3; cash & investments = $5,000,000,000; total debt = $2,000,000,000; shares outstanding = 1,000,000,000; price = $150.
- Convert percent-numbers: growth 8 ÷ 100 = 0.08; discount 10 ÷ 100 = 0.10; terminal growth 3 ÷ 100 = 0.03.
- Year 1 FCF = $10,000,000,000 × 1.08 = $10,800,000,000. PV = $10,800,000,000 ÷ 1.10 = $9,818,181,818.18.
- Year 2 FCF = $10,000,000,000 × 1.08² = $11,664,000,000. PV = $11,664,000,000 ÷ 1.10² = $9,639,669,421.49.
- Year 3 FCF = $10,000,000,000 × 1.08³ = $12,597,120,000. PV = $12,597,120,000 ÷ 1.10³ = $9,464,402,704.73.
- Year 4 FCF = $10,000,000,000 × 1.08⁴ = $13,604,889,600. PV = $13,604,889,600 ÷ 1.10⁴ = $9,292,322,655.56.
- Year 5 FCF = $10,000,000,000 × 1.08⁵ = $14,693,280,768. PV = $14,693,280,768 ÷ 1.10⁵ = $9,123,371,334.55.
- Sum of PV forecast cash flows = $47,337,947,934.51.
- Terminal value = $14,693,280,768 × 1.03 ÷ (0.10 − 0.03) = $216,201,131,300.57.
- PV of terminal value = $216,201,131,300.57 ÷ 1.10⁵ = $134,243,892,494.04.
- Enterprise value = $47,337,947,934.51 + $134,243,892,494.04 = $181,581,840,428.54.
- Equity value = $181,581,840,428.54 + $5,000,000,000 − $2,000,000,000 = $184,581,840,428.54.
- Intrinsic value per share = $184,581,840,428.54 ÷ 1,000,000,000 = $184.58.
- Valuation gap = ($184.58 − $150.00) ÷ $150.00 × 100 = 23.05%.
FAQ
What is a DCF calculator?
A DCF calculator estimates intrinsic value by discounting expected future free cash flows back to today’s dollars.
What free cash flow should I use in this DCF calculator?
Use unlevered free cash flow to the firm, also called FCFF. Many screener FCF figures are levered, which can distort this enterprise-value model.
Does this DCF calculator use live financial data?
No. V1 uses user-entered assumptions. Future versions may prefill from official SEC-derived data.
Why must terminal growth be below the discount rate?
The Gordon Growth formula divides by discount rate minus terminal growth. If terminal growth is equal to or higher than the discount rate, the model breaks.
Is DCF useful for every company?
It is usually more useful for companies with positive, reasonably predictable free cash flow.
What discount rate should investors use?
The discount rate is a required-return assumption. Different investors use different rates, so the output should be tested with multiple scenarios.
Continue your analysis
Educational disclaimer
DCF is assumption-sensitive and educational. The intrinsic value shown here is not a price target and not a recommendation to buy or sell any security. Small changes in the growth rate, discount rate, or terminal growth rate can swing the result dramatically — always test multiple scenarios before drawing conclusions. This v1 tool uses user-entered assumptions only, not live financial data, and pairs unlevered free cash flow (FCFF) with a WACC discount rate; using levered cash flow can double-count debt. Nothing on this page is investment advice.