Finance tools
Intrinsic value calculator
Free stock intrinsic value calculator and fair value calculator for US equities. Estimate whether a share is undervalued with Benjamin Graham’s intrinsic value formula or a two-stage DCF (discounted cash flow calculator). Enter EPS or free cash flow per share, growth, WACC/discount rate, and optional market price for live margin of safety, a transparent DCF breakdown table, scenario presets, and ungated CSV/PDF export — no sign-up.
What is intrinsic value?
Intrinsic value is your estimate of what a business or stock is worth based on fundamentals — earnings, cash flow, growth, and risk — independent of today’s market price. Benjamin Graham and Warren Buffett popularized buying when market price sits below intrinsic value with a margin of safety.
Market price reflects sentiment, liquidity, and short-term news. Intrinsic value focuses on long-run cash the business can generate. Use Graham’s formula for a quick earnings-based check; use DCF when you have free cash flow forecasts and a defensible discount rate.
Graham + DCF modes
Switch between Benjamin Graham’s revised formula and a two-stage DCF with Gordon terminal value.
Margin of safety
Compare fair value to market price and see undervalued, fair, or overvalued verdict bands.
DCF breakdown table
Year-by-year projected FCF and present values plus terminal value components.
CSV/PDF export
Download inputs and results for Excel models or investment notes without an email gate.
Related finance tools: WACC calculator (discount rate for DCF), CAGR calculator, compound interest calculator, yield to maturity calculator, and break-even calculator.
How to calculate intrinsic value
Graham mode — enter trailing EPS, expected earnings growth rate (as a percent), and current AAA corporate bond yield. The calculator applies Graham’s revised formula and optional margin of safety when you add market price.
Benjamin Graham intrinsic value formula
V = EPS × (8.5 + 2g) × (4.4 / Y)Where g = expected growth rate (%) and Y = AAA bond yield (%). Graham adjusted the classic P/E rule for growth and interest rates.
DCF mode — enter free cash flow per share, near-term growth rate, projection years, terminal growth, and discount rate (often WACC). The engine projects FCF, discounts each year, adds a Gordon terminal value, and sums to intrinsic value per share.
- Forecast FCF for years 1…n at growth rate g₁.
- Discount each year’s FCF at rate r.
- Compute terminal value: TV = FCFₙ × (1 + g₂) / (r − g₂).
- Discount TV to present and add to PV of forecast years.
Margin of safety
Margin of safety (MOS) measures how far market price sits below your intrinsic value estimate:
Margin of safety formula
MOS (%) = (Intrinsic value − Market price) / Intrinsic value × 100Graham often sought 20–35% margin of safety to buffer forecasting error. This calculator flags undervalued when MOS > 5%, overvalued when MOS < −5%, and fair in between — illustrative bands only, not buy/sell advice.
MOS depends entirely on your inputs. Small changes to growth or discount rate can swing verdicts. Treat MOS as a discipline tool, not a trading signal.
DCF vs WACC
In a DCF intrinsic value model, the discount rate should match the risk of the cash flows you project. For unlevered firm cash flows, analysts often use WACC (weighted average cost of capital). For equity-level FCF, use cost of equity instead.
Use our WACC calculator to estimate a blended discount rate from market values of equity and debt, cost of equity (CAPM helper included), and after-tax cost of debt. Default DCF discount in this tool is 10% — adjust for your company’s risk, leverage, and geography.
Graham vs DCF — when to use each
US SERP leaders combine Graham and DCF because they answer different questions. Graham is a fast earnings-based screen; DCF is a cash-flow model when you have FCF forecasts and a defensible discount rate.
| Use Graham when… | Use DCF when… |
|---|---|
| Stable, profitable companies with positive EPS | You have FCF per share from filings or estimates |
| Quick fair-value screen or value-investing checklist | You want a year-by-year cash-flow bridge + terminal value |
| You can estimate earnings growth and AAA bond yield | You can justify WACC or cost of equity as discount rate |
| Beginners learning Benjamin Graham’s revised formula | Intermediate models comparing multiple stocks on FCF |
Warren Buffett describes intrinsic value as the present value of future cash a business can distribute to owners — closer to DCF than a single-year EPS shortcut. Many investors run both: Graham for a sanity check, DCF when cash flows are predictable enough to forecast.
Intrinsic value in Excel
Related searches often ask for a stock intrinsic value calculator Excel template. You can replicate this page’s math in a spreadsheet or export CSV from the calculator above.
| Calculation | Excel formula |
|---|---|
| Graham intrinsic value | =EPS*(8.5+2*GrowthPct)*(4.4/BondYieldPct) |
| DCF present value (year t) | =FCF_t/(1+DiscountRate)^t |
| Gordon terminal value | =FinalFCF*(1+TerminalGrowth)/(DiscountRate-TerminalGrowth) |
| Margin of safety % | =(IntrinsicValue-Price)/IntrinsicValue |
Use the same units as this calculator (growth and yields as percents, e.g. 10 for 10%). Ensure discount rate > terminal growth or the Gordon terminal formula is undefined. Export CSV after a run to paste inputs into your model.
Worked examples
Graham example (canonical benchmark): EPS $23, growth 10%, AAA yield 3.7%, market price $500.
V = 23 × (8.5 + 20) × (4.4 / 3.7) ≈ $779.51 per share. MOS ≈ 35.9% → undervalued vs $500. Load the Graham example preset above to reproduce.
DCF example: FCF per share $5, growth 8% for 5 years, terminal growth 2.5%, discount 10%, price $80.
Intrinsic value ≈ $86.03 with MOS ≈ 7%. Load the Conservative DCF preset. PV of forecast years ≈ $23.67; PV of terminal ≈ $62.36.
When not to use DCF
DCF and Graham formulas work best for operating companies with positive, somewhat predictable earnings or cash flow. Be cautious when:
- Banks and insurers — balance-sheet-centric models differ from simple FCF per share.
- Pre-profit startups — negative FCF and hyper-growth make terminal value dominate.
- Deep cyclicals — peak earnings distort EPS and near-term FCF.
- Commodity swings — normalize earnings before Graham; use scenario ranges for DCF.
This calculator is educational. It does not fetch ticker data, adjust for dilution, or model debt explicitly — verify inputs from filings before any investment decision.
How to use this calculator
Choose Graham or DCF mode
Use the mode rail: Graham for EPS-based fair value; DCF for free cash flow per share with a terminal value.
Enter fundamentals
Graham: EPS, growth %, AAA bond yield. DCF: FCF per share, growth, projection years, terminal growth, and discount rate (WACC).
Add market price (optional)
Enter current share price to compute margin of safety and valuation verdict.
Review breakdown and export
In DCF mode, inspect the year-by-year table. Download CSV or PDF when you need to document assumptions.
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Frequently asked questions about this intrinsic value calculator
What is intrinsic value of a stock?
Intrinsic value is an estimate of a stock’s fair worth based on fundamentals — earnings, cash flow, growth, and risk — rather than today’s market price. This free intrinsic value calculator compares fair value to price so you can see margin of safety — illustrative only, not investment advice.
How do you calculate intrinsic value?
Common methods: Benjamin Graham’s formula (EPS, growth, bond yield) for a quick earnings-based value, or discounted cash flow (DCF) when you forecast free cash flow and discount at an appropriate rate. This calculator supports both modes with live results.
What is Benjamin Graham's intrinsic value formula?
V = EPS × (8.5 + 2g) × (4.4 / Y), where g is expected earnings growth (%) and Y is the current AAA corporate bond yield (%). Graham revised the classic P/E rule to reflect growth and interest-rate levels.
Does DCF calculate intrinsic value?
Yes. A DCF model estimates intrinsic value by discounting projected free cash flow (plus terminal value) to present value per share. The output is only as reliable as your growth and discount-rate assumptions.
What discount rate should I use for DCF?
Use a rate that matches cash-flow risk: often WACC for unlevered firm cash flows or cost of equity for equity FCF. Many US operating companies fall in 8–12% (10% default here). WACC blends cost of equity and after-tax cost of debt — estimate it with our WACC calculator, then enter the result as discount rate.
What is a good margin of safety?
Graham often targeted 20–35% margin of safety — buying well below estimated intrinsic value to absorb forecasting error. There is no universal “good” number; higher MOS implies more conservative assumptions or a cheaper price.
What is the difference between intrinsic value and market price?
Market price is what buyers pay today on an exchange. Intrinsic value is your fundamental estimate of fair worth. When price < intrinsic value (positive margin of safety), value investors may see opportunity — subject to model risk.
What terminal growth rate should I use?
Terminal growth (g₂) is usually set near long-run GDP + inflation — often 2–3% for mature economies. It must stay below your discount rate or the Gordon model is undefined. This calculator defaults to 2.5%.
The terminal formula TV = FCF × (1 + g) ÷ (r − g) is a growing perpetuity. Cross-check PV with our perpetuity calculator and discount rate with our WACC calculator.
What is the difference between intrinsic value and book value?
Book value is accounting net assets (assets minus liabilities) from the balance sheet — historical cost, often ignoring brand and growth. Intrinsic value is forward-looking: what the business can earn or generate in cash over time. High-quality companies often trade far above book value because earnings power exceeds recorded assets.
How does Warren Buffett calculate intrinsic value?
Buffett frames intrinsic value as the discounted value of cash that can be taken out of a business during its remaining life — a DCF mindset. In practice he also uses simple heuristics (owner earnings, moat, management) and demands a margin of safety vs market price. This calculator’s DCF mode follows that cash-flow logic; Graham mode is a faster earnings-based shortcut.
How accurate is DCF valuation?
DCF output is only as good as your growth and discount assumptions — reasonable changes can move fair value 20–50%. It works best for stable, cash-generative businesses. Use Graham for a quick cross-check, stress-test growth and WACC, and never rely on a single point estimate for trading decisions.
How do I calculate intrinsic value in Excel?
Graham: =EPS*(8.5+2*g)*(4.4/Y). DCF: project FCF rows, =FCF/(1+r)^n, terminal =FCF_n*(1+g2)/(r-g2), sum PVs. Margin of safety: =(V-Price)/V. Export CSV from this calculator or see the Excel formula table above.