Use this intrinsic value calculator to determine the fundamental worth of a stock and make informed investment decisions.
How to Use the Intrinsic Value Calculator:
To use this Intrinsic Value Calculator, enter your company’s current earnings, the expected growth rate of the earnings, the number of years you wish to project this growth, and your desired discount rate. After filling out these fields, click the calculate button to see the intrinsic value result.
How the Calculator Works:
The calculator takes the earnings and projects them into the future based on the growth rate you’ve provided. It then discounts those future earnings back to their present value using the discount rate. The sum of these present values of future earnings is the intrinsic value of the company.
This calculator uses the discounted cash flow (DCF) model for a fixed period which is a common method in finance for valuing a company.
Limitations of the Calculator:
Calculating intrinsic value can be complex and the result is only as accurate as the inputs. The actual intrinsic value may differ due to factors not accounted for in this model, such as changes in market conditions, economic factors, or unexpected events affecting the company’s performance.
Furthermore, this calculator assumes a constant growth rate and discount rate, which may not reflect the actual situation and can drastically change the valuation result.
Please use this tool as a starting point for your valuation and consult a financial professional before making investment decisions.