What is intrinsic value?

Intrinsic value is an estimate of what a business is actually worth, based on its fundamentals — earnings, assets, and growth prospects. It is independent of the current market price. When market price falls below intrinsic value, a potential margin of safety exists.

What is the Graham Number?

The Graham Number is a formula developed by Benjamin Graham: √(22.5 × EPS × Book Value per Share). It combines earnings and assets to produce a conservative upper-bound estimate. The multiplier 22.5 reflects Graham's maximum acceptable P/E (15) × maximum acceptable P/B (1.5). It works best for stable, profitable companies with tangible book value.

What is the P/E Valuation method?

The P/E valuation method multiplies earnings per share by a normalized P/E ratio to estimate fair value. A common starting point is 15× — the long-run historical average for U.S. equities. Adjust the target P/E based on the company's sector, competitive moat, and growth trajectory.

What is Earnings Power Value (EPV)?

Earnings Power Value estimates what a company is worth assuming its current earnings persist indefinitely, growing at a steady rate. It uses the formula: EPS × (1 + growth rate) ÷ (discount rate − growth rate). It is a simplified form of a discounted cash flow model useful for mature, stable companies.

Why does this calculator blend multiple methods?

No single valuation model is perfect. The Graham Number favors asset-heavy businesses; P/E valuation favors stable earners; EPV works best for steady compounders. Blending all three reduces reliance on any single model's assumptions and typically produces a more balanced estimate.

How does Equity Rank estimate intrinsic value?

Equity Rank blends 8–15 valuation models per stock — including DCF, Graham Number, P/E, P/B, P/S, EV/EBITDA, PEG, and DDM — each weighted by sector-calibrated method weights. The output is a model fair value range (weighted 25th to 75th percentile across methods), not a single point. This range is a model estimate under specific assumptions and does not represent a prediction of future market price.

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Intrinsic Value Calculator

Estimate what a stock is actually worth using three valuation methods: the Graham Number, P/E valuation, and Earnings Power Value — then compare to the current market price.

Earnings Per Share (EPS)

Book Value Per Share (BVPS)

Current Market Price

Enter EPS and Book Value per Share above to calculate intrinsic value.

How each method works

Graham Number

Benjamin Graham's conservative formula: √(22.5 × EPS × BVPS). Combines earnings and net assets to produce a ceiling price. Best for stable, asset-backed businesses.

P/E Valuation

Multiplies EPS by a normalized P/E ratio. Simple and widely used. The default 15× reflects the long-run average for U.S. equities; adjust for high-growth or cyclical businesses.

Earnings Power Value

A simplified discounted cash flow model using EPS, growth rate, and required return. Captures the time value of future earnings in a single formula.

Next step: check your margin of safety

Once you have an intrinsic value estimate, use the Margin of Safety Calculator to find the maximum price that provides an adequate cushion — then compare to real-time screener data.

MoS Calculator Try Free Screener

No single model captures fair value. Triangulate with DCF, Graham Number, Margin of Safety, and asset-based methods to build a complete valuation picture.

DCF Calculator Graham Number Calculator Margin of Safety Calculator Book Value Calculator WACC Calculator Try Free Screener

Learn more about how Equity Rank weights these models in the methodology or browse the full free tool directory. Still have questions? See the FAQ.

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Research and educational purposes only. Not investment advice.

Frequently asked questions

Common questions about intrinsic value and how to use this calculator.

This tool is for research and educational purposes only. It does not constitute financial advice. All outputs depend entirely on user-provided inputs and simplified valuation models — results are estimates, not guarantees. Equity Rank is not a registered investment adviser. Consult a qualified financial professional before making investment decisions.