Margin of Safety Calculator
Enter a stock's current price and your fair value estimate to calculate the margin of safety — and your maximum price to pay.
Target Margin of Safety
Enter a current price and fair value estimate above to see results.
How to interpret your result
What does margin of safety mean?
Margin of safety is the gap between a stock's current price and your estimate of its intrinsic value, expressed as a percentage. It acts as a buffer — the wider the gap, the more room for error in your assumptions before a position moves against you.
What MoS% should you target?
As a general guide: 10–15% for large-cap, dividend-paying companies with stable earnings; 20–30% for growth-oriented businesses; 30–50% for speculative or cyclical positions where fair value estimates carry more uncertainty.
How to estimate fair value
Common approaches include discounted cash flow (DCF) analysis, the Graham Number (derived from EPS and book value), and industry P/E or EV/EBITDA multiples. Blending several methods reduces reliance on any single model's assumptions.
Let the screener find them for you
Equity Rank scores 800+ stocks across 15 fair value models. The screener surfaces stocks where the current price corresponds to potential undervaluation — no manual calculation required.
Go deeper: multi-method valuation
No single model captures fair value. Triangulate with DCF, Graham Number, Margin of Safety, and asset-based methods to build a complete valuation picture.
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 margin of safety 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. Equity Rank is not a registered investment adviser.