DCF Calculator
Estimate a stock's intrinsic value using a two-stage Discounted Cash Flow model. Set your EPS, growth assumptions, and WACC — the calculator projects 10 years of earnings and discounts them to present value.
Value = Σ [EPSn / (1+WACC)n] + PV(Terminal Value)
Inputs
Analyze a stock →TTM EPS from the income statement. Must be positive.
High-growth phase. Typical range: 8–25%.
Tapering phase. Should be lower than years 1–5.
Perpetuity rate. Typical: 2–3% (nominal GDP).
Required return. US large-cap: 8–12%.
Discount applied to intrinsic value.
Intrinsic Value
$168.39
DCF estimate — mathematical output based on your inputs
Attractive Entry Below
$134.71
Intrinsic value × (1 − 20.00% MoS)
PV Stage 1
$29.44
Years 1–5
PV Stage 2
$31.79
Years 6–10
PV Terminal
$107.15
63.63% of value
Terminal Value
$253.67
Pre-discount (yr 10+)
Value Composition
Year-by-Year EPS Projection
| Year | Phase | Projected EPS | Discounted Value |
|---|---|---|---|
| 1 | Stage 1 | $5.75 | $5.2752 |
| 2 | Stage 1 | $6.6125 | $5.5656 |
| 3 | Stage 1 | $7.6044 | $5.872 |
| 4 | Stage 1 | $8.745 | $6.1952 |
| 5 | Stage 1 | $10.0568 | $6.5362 |
| 6 | Stage 2 | $10.8613 | $6.4763 |
| 7 | Stage 2 | $11.7302 | $6.4168 |
| 8 | Stage 2 | $12.6687 | $6.358 |
| 9 | Stage 2 | $13.6821 | $6.2996 |
| 10 | Stage 2 | $14.7767 | $6.2418 |
| TV | Terminal | — | $107.15 |
| Intrinsic Value (Sum) | $168.39 | ||
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How the DCF model works
Understanding the mechanics behind discounted cash flow analysis.
Stage 1 — Years 1–5
EPS grows at your near-term rate each year. Each year's earnings are discounted by (1 + WACC)n to get present value. High-growth companies typically see their highest EPS expansion here.
Stage 2 — Years 6–10
Growth tapers to your long-term rate. This reflects the natural slowdown as companies mature and competition increases. Year 5 EPS compounds forward at the slower rate.
Terminal Value
After year 10, earnings are assumed to grow at the terminal rate in perpetuity. The Gordon Growth Model formula — EPS10 × (1 + g) / (WACC − g) — captures this. Terminal value typically represents 60–80% of total intrinsic value.
When DCF is most and least accurate
Most reliable
- Mature companies with stable, predictable earnings
- Businesses with consistent EPS growth history
- Capital-light models with high earnings conversion
- Dividend payers with long track records
Least reliable
- Early-stage or pre-profit companies (negative EPS)
- Cyclical businesses with volatile earnings swings
- Companies undergoing major restructuring
- When discount rate ≈ terminal growth rate
Frequently asked questions
Common questions about DCF analysis and how to use this calculator.
DCF outputs are mathematical estimates based on user inputs, not investment advice. All results depend entirely on the assumptions you provide — small changes to growth rate, WACC, or terminal growth can shift the output significantly. This tool is for research and educational purposes only. Equity Rank is not a registered investment adviser. Consult a qualified financial professional before making investment decisions.