Finance tools
Margin of safety calculator
Free margin of safety calculator for stocks and value investing. Apply the margin of safety formula with your fair value per share and market price to see margin of safety percentage, cushion in dollars per share, and an illustrative verdict — or set a target MOS for the maximum price to pay. Live results, formula card, CSV/PDF export. (For sales above break-even, use our break-even calculator — accounting margin of safety, not stock MOS.)
What is margin of safety in investing?
Margin of safety (MOS) in investing is the gap between your estimate of a stock’s fair or intrinsic value and its current market price, usually expressed as a percentage of fair value. Benjamin Graham and Warren Buffett popularized buying with a cushion so forecasting errors and market volatility hurt less.
This page is a stock margin of safety calculator — not break-even margin of safety (sales vs breakeven in accounting) and not safety stock (inventory planning).
Margin of safety formula
Investment margin of safety
MOS (%) = (Fair value − Market price) ÷ Fair value × 100Equivalent (Wall Street Prep style): MOS (%) = (1 − Market price ÷ Fair value) × 100
Margin of safety in dollars (per share): MOS ($) = Fair value − Market price
Maximum price to pay for a target MOS: Max price = Fair value × (1 − Target MOS% ÷ 100)
Margin of safety percentage vs dollars
Margin of safety percentage scales the discount to your fair value estimate — useful for comparing two stocks with different share prices. Margin of safety in dollars is the raw per-share cushion: fair value minus market price (what this calculator shows as cushion per share).
Example: fair value $100 and price $80 → 20% MOS and $20 per share below your estimate. If price is $110, MOS is −10% and −$10 — trading above your model with no discount cushion.
How to use this margin of safety calculator
Enter fair value per share
Use your intrinsic value estimate from a DCF, Graham model, or blended valuation — this tool does not fetch live quotes.
Calculate MOS or target buy price
Choose Calculate MOS and add market price, or Target buy price and pick a target MOS % (10–50% presets).
Read MOS %, verdict, and export
Review margin of safety %, dollar cushion, and illustrative verdict bands — then export CSV or PDF if needed.
What is a good margin of safety?
Graham often sought roughly 20–35% margin of safety. Many value investors use a tiered framework (illustrative, not rules): about 10–15% for large-cap names with stable earnings; 20–30% for growth businesses with more forecast risk; 30–50% for speculative, cyclical, or highly uncertain fair value estimates.
This calculator uses illustrative verdict bands (±5% around fair value) — not buy or sell advice. Pick a target MOS in Target buy price mode that matches your risk tolerance.
Margin of safety vs break-even margin of safety
In break-even analysis, margin of safety measures how far sales exceed the break-even point — in units or percent of planned volume. Formula: (Current sales − Breakeven sales) ÷ Current sales.
In value investing, margin of safety compares share price to fair value per share. Use our break-even calculator for unit economics; use this page for stock MOS.
Worked examples
Example 1 — MOS % and dollars: Fair value $100, market price $80. MOS = (100 − 80) ÷ 100 = 20%; cushion = $20 per share.
Example 2 — Max buy price: Fair value $100, target MOS 25%. Max price = 100 × (1 − 0.25) = $75.
Example 3 — Premium (negative MOS): Fair value $100, price $115. MOS = (100 − 115) ÷ 100 = −15% — price is 15% above your estimate; the calculator still shows this clearly.
Excel and Google Sheets formulas
| Calculation | Formula (A = fair value, B = price) |
|---|---|
| MOS % | =(A1-B1)/A1 |
| MOS % (formatted) | =TEXT((A1-B1)/A1,"0.00%") |
| Alternate MOS % | =1-B1/A1 |
| MOS dollars per share | =A1-B1 |
| Max price for 20% MOS | =A1*(1-0.2) |
| Max price (target % in C1) | =A1*(1-C1) |
How to estimate fair value
Fair value is only as good as your model. Common approaches: discounted cash flow (DCF), Benjamin Graham’s earnings formula, or multiples vs peers. Blend methods when assumptions differ widely.
Build fair value with our intrinsic value calculator (Graham + two-stage DCF) and discount rate with our WACC calculator, then paste fair value here for MOS.
Limitations and disclaimer
Outputs are illustrative and depend entirely on your fair value and price inputs. This is not investment, tax, or financial advice. See Investor.gov — stocks basics for educational context.
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Frequently asked questions
How do you calculate margin of safety for a stock?
MOS (%) = (Fair value − Market price) ÷ Fair value × 100 (same as 1 − Price ÷ Fair value). MOS in dollars = Fair value − Market price per share. Enter fair value and price above for live results.
What is the margin of safety in investing?
In value investing, margin of safety is the discount of market price to your intrinsic or fair value estimate — a buffer against model error and volatility. It is not the same as break-even margin of safety in accounting.
What is the margin of safety formula?
For investing: (Fair value − Price) / Fair value. Equivalently 1 − Price/Fair value. For break-even analysis the formula uses sales and breakeven — see our break-even calculator.
What is a good margin of safety percentage?
Graham often cited 20–35% for equities. Higher MOS implies more conservative pricing or higher model uncertainty — there is no single correct number for every stock.
Can margin of safety be negative?
Yes. Negative MOS means market price is above your fair value estimate — no discount cushion relative to your model. Quality compounders can trade above simple fair value for long periods.
How do I find the maximum price to pay?
Use Target buy price mode: Max price = Fair value × (1 − Target MOS% ÷ 100). Example: $100 fair value and 20% target MOS → pay at most $80.
How is fair value estimated?
Common methods include DCF, Graham’s formula, and peer multiples. Use our intrinsic value calculator for Graham + DCF fair value, then enter the result here.
What is Warren Buffett's margin of safety?
Buffett describes buying below estimated intrinsic value with room for error — a DCF mindset plus business quality judgment. This calculator applies the arithmetic MOS once you supply fair value and price.
Is margin of safety the same as profit margin?
No. Profit margin is profit ÷ revenue on a product or business. Margin of safety here is the discount of stock price to your fair value estimate.
Is this the same as safety stock in inventory?
No. Safety stock is extra inventory to buffer demand variability. This tool is for investment margin of safety. For inventory, see our safety stock calculator.
What is the difference between intrinsic value and margin of safety?
Intrinsic (fair) value is your per-share worth estimate. Margin of safety measures how far price sits below that estimate. Compute fair value with our intrinsic value calculator; compute MOS here.
Is 20% margin of safety enough?
It can be reasonable for established businesses with predictable earnings — but “enough” depends on model risk, debt, and cyclicality. Many investors demand more MOS for speculative names.
What is margin of safety in dollars?
MOS ($) = Fair value − Market price per share. A positive number means price sits below your fair value; negative means price is above your estimate. This calculator shows the dollar cushion alongside MOS %.
What is a 30% margin of safety on a $100 fair value?
For stock valuation, a 30% MOS on $100 fair value means you would pay at most $70 per share (100 × (1 − 0.30)). That is different from a 30% retail markup on $100 cost — use this tool only for investing MOS, not product pricing.
Is this investment advice?
No. This calculator is for education and planning only. Verify inputs and consult qualified professionals before investing.