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Valuation Calculator

Is the stock expensive? Check it with multiples, then with a reverse DCF, which works backwards: how fast must free cash flow grow each year to justify today’s market cap?

Three tabs

  • Multiples: Market cap, P/E, P/S, EV/Sales and PEG from price, shares, revenue and net income. Best for comparing peers.
  • Reverse DCF: Enter market cap, current free cash flow (FCF) and a discount rate to get the annual FCF growth the market is pricing in. The real question is whether that growth is plausible.
  • DCF: Plug in your own growth assumptions to get a per-share value and compare it with the price.

Glossary

  • P/E = market cap ÷ net income: what you pay per dollar of profit.
  • P/S = market cap ÷ revenue, common for growth companies with thin profits.
  • EV (enterprise value) = market cap − net cash. Cash-rich companies have an EV below their market cap.
  • PEG = P/E ÷ expected earnings growth (%). Around 1 is often called fair for the growth, but it’s no hard rule.
  • Discount rate: the return you require, used to turn future cash into today’s value. Try a range like 8–12%.

Limits

DCFs are extremely sensitive to inputs. A one-point change in the discount rate or a few points of growth can swing the result widely, so think in ranges, not a single answer. For education only, not investment advice.