Free DCF Calculator
Perform a professional dcf calculation in seconds. Our free DCF valuation calculator helps you estimate the intrinsic value of stocks using the discounted cashflow model. Learn how to calculate DCF
How to Use This DCF Model Calculator
A DCF calculator determines the value of a company today based on projections of how much money it will generate in the future. This discounted cashflow analysis is widely considered the "gold standard" of stock valuation.
The Variables
| Input | Meaning |
|---|---|
| Free Cash Flow (FCF) | Cash left over after paying for operating expenses and CAPEX. |
| Growth Rate | How fast FCF is expected to grow over the next 10 years. |
| Discount Rate | Your required rate of return (often 8-12%). |
| Terminal Growth Rate | The expected growth rate of the business after the 10-year projection period. |
Why Intrinsic Value Matters
Knowing how to calculate DCF gives you an edge. The market price tells you what others are paying, but the intrinsic value tells you what the asset is actually worth.
By using this dcf valuation calculator, you can spot disparities between price and value—the core principle of value investing.
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After finding a stock's value with our dcf model calculator, use our other tools to manage your portfolio growth.
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DCF Valuation FAQ
- A DCF Calculator (Discounted Cash Flow) is a professional investment calculator that estimates the intrinsic value of an investment based on its expected future cash flows. It discounts these future cash flows back to their present value using a specific discount rate, helping investors decide if a stock is overvalued or undervalued.
- The core formula for DCF calculation is: DCF = FCF₁ / (1+r)¹ + FCF₂ / (1+r)² + ... + FCFₙ / (1+r)ⁿ + Terminal Value. Where FCF is Free Cash Flow, r is the discount rate, and n is the time period. The terminal value is derived using the Terminal Growth Rate. Our tool automates this complex dcf calculation formula for you.
- Terminal Growth is the rate at which a company's free cash flow is expected to grow indefinitely. It is used in the terminal value calculation of a DCF model to estimate the value of a company's future cash flows beyond the forecast period. The formula is the standard Gordon Growth Model: Terminal Value = [FCF₁₀ × (1 + g)] / (r - g). It is correct because businesses are 'going concerns' that generate cash indefinitely. Since we can't project every single year to infinity, this formula mathematically captures the value of all future cash flows beyond our 10-year forecast (the terminal period), treating them as a perpetual annuity growing at a stable rate (g).
- The discount rate represents your required annual rate of return. It is used to convert future cash flows into today's dollars (Present Value). It accounts for both the 'time value of money' (a dollar today is worth more than a dollar tomorrow) and the 'risk' of the investment. Generally, the riskier the company, the higher the discount rate you should apply.
- Free cash flow calculation is vital because it represents the actual cash a company generates after accounting for capital expenditures. Unlike net income, it is harder to manipulate, making it the bedrock of any accurate discounted cashflow analysis.
- To calculate DCF, project the company's free cash flow for the next 5-10 years, determine an appropriate discount rate, estimate a terminal value using a Terminal Growth Rate for the period beyond, and then discount all those values back to the present day using your discount rate.