DCF Calculator. Discounted Cash Flow Valuation
What are the cash flows worth today?
Estimate what a share could be worth by growing its free cash flow, adding a terminal value and discounting everything back at your required return.
- Free, no sign-up
- Runs in your browser
- Shareable results
- Educational only
Enter your numbers.
Free cash flow divided by shares outstanding. Must be positive.
The yearly growth in free cash flow during the forecast years.
Whole years, from 1 to 30.
The steady growth rate after the forecast. It must stay below the discount rate.
The yearly return you require. A higher rate gives a lower value.
The market price, to compare with the value.
These are hypothetical assumptions for learning, not forecasts or advice.
Result
Where the value comes from.
View the year-by-year table
What the numbers mean.
Value is future cash, discounted.
A DCF adds up the cash a business could generate and discounts it, because money later is worth less than money today.
The terminal value dominates.
Most of the value usually sits in the years beyond the forecast, so small changes to terminal growth and the discount rate move the answer a lot.
A model is a range, not a point.
Run cautious and optimistic cases. The gap between them shows how uncertain any single estimate is.
About this dcf calculator.
A DCF calculator estimates what a share could be worth today from its future free cash flow. Enter the latest free cash flow per share, a growth rate for the forecast years, how many years to forecast, a terminal growth rate, your discount rate and the current price. The calculator returns an estimated value per share, how it compares with the price, and how much of the value comes from the terminal value.
A DCF is only as good as its assumptions, so use it to test ideas rather than to find a single answer. See the glossary entry on the price-to-earnings ratio for the shortcut many investors use first. The stock valuation calculator values a share from earnings and a P/E, and the IRR calculator finds the rate of return on a set of cash flows.
How the dcf calculator works in practice.
Using the default inputs: free cash flow per share (last year) $5; growth rate during the forecast 8%; forecast years 10 years; terminal growth rate 2.5%; discount rate 10%; current share price $100.
Value versus current price: 2.14%
Margin of safety: 2.10%
Present value of forecast cash flows: $45.26
Present value of terminal value: $56.88
Terminal value share of total: 55.69%
Free cash flow in year 10: $10.79
With the “Cautious” preset, estimated value per share: $62.41. With the “Optimistic” preset, estimated value per share: $170.84. With the “Short forecast” preset, estimated value per share: $86.01. Change one input at a time to see which assumption matters most.
How to choose your inputs for the dcf calculator.
Free cash flow per share (last year). Free cash flow divided by shares outstanding. Must be positive.
Growth rate during the forecast. The yearly growth in free cash flow during the forecast years.
Forecast years. Whole years, from 1 to 30.
Terminal growth rate. The steady growth rate after the forecast. It must stay below the discount rate.
Discount rate. The yearly return you require. A higher rate gives a lower value.
Current share price. The market price, to compare with the value.
How the dcf calculator works.
The calculator grows free cash flow per share at your forecast growth rate, discounts each year back to today, adds a terminal value for all later years, and discounts that too. The total is the estimated value per share.
Present value of year k = cash flow ÷ (1 + discount rate)^k
Terminal value = final cash flow × (1 + terminal growth) ÷ (discount rate − terminal growth)
Value per share = sum of present values + present value of terminal value
The model uses one growth rate during the forecast and a steady terminal rate. It ignores debt, changes in share count and cash on the balance sheet, so use free cash flow per share and treat the output as a rough estimate, not a price target.
Limits of this dcf calculator.
A few inputs drive almost all of the result, and the terminal value usually makes up most of it, so small changes in terminal growth or the discount rate can move it a lot. The model uses one growth rate for the forecast, ignores debt, share count changes and cash on the balance sheet, and works with free cash flow per share. Treat the output as one scenario, not a price target or advice.
Common questions about the dcf calculator.
What is a DCF?
A discounted cash flow model estimates what an investment is worth today by discounting its expected future cash flows back at a required return.
What discount rate should I use?
Use the return you require for the risk, often between 8% and 12% for shares. A higher rate gives a lower value, so test several.
What terminal growth rate should I use?
A cautious choice is at or below long-run economic growth, often 2% to 3%. It must stay below the discount rate.
Why is the terminal value so large?
Because it stands for every year after the forecast. Small changes in terminal growth or the discount rate move it a lot.
Is a DCF value a price target?
No. It shows what your assumptions imply. Different assumptions give very different values, so test a range.
More calculators.
Educational illustration only, not a forecast or personal investment recommendation. Results depend entirely on the assumptions entered.
Further learning: Glossary · Investor.gov: Financial tools and calculators · Research methodology · Financial disclaimer