About this tool
Enter any stock ticker to estimate its intrinsic value using Discounted Cash Flow (DCF) analysis. The tool pulls live data from Yahoo Finance, calculates the discount rate (WACC) from first principles — cost of equity via the CAPM formula, cost of debt from the income statement, weighted by the company's actual capital structure — and runs three scenarios side by side: Bear, Base, and Bull. Each scenario shows intrinsic value per share, the margin of safety versus today's price, and the expected annualised return if the price converges to fair value over 1, 3, or 5 years.
It adapts the method to the company. Banks and insurers automatically switch to the Dividend Discount Model (DDM), because free cash flow is structurally meaningless for them — deposits and reserves are raw materials, not owner earnings. Other dividend payers can optionally be valued with DDM too. When a company has negative or missing free cash flow (common for fast-growing firms), you can normalise it from revenue × a target margin, and the tool estimates when FCF is likely to turn positive.
The discount rate is tailored to the market. For US, Australian (ASX), and Indian (NSE/BSE) stocks the tool fetches the correct local 10-year government bond yield as the risk-free rate, applies a market-appropriate equity risk premium, and shows a sector-specific WACC reference range (e.g. ASX miners 10–12%, US utilities 5.5–6.5%, Indian IT 11–14%). For non-US stocks it also applies a beta floor, because Yahoo measures beta against the S&P 500, which understates risk for international shares. Australian stocks get an explanation of franking credits and how dividend imputation affects the effective tax rate.
It's built for individual stocks — not ETFs, indices, or pre-revenue companies — and works across US, Australian, Indian, UK, and other major markets with automatic currency handling. Everything runs in your browser; the only thing sent externally is the ticker symbol.
Further reading: How to Value a Stock: DCF and the Dividend Discount Model — the methods, the exact inputs, and when to use each →
Frequently asked questions
What is DCF analysis?
Discounted Cash Flow analysis estimates what a business is worth today based on the cash it is expected to generate in the future. Future cash flows are "discounted" back to present value because money received later is worth less than money received now. The result is an intrinsic value — what the stock should theoretically be worth if the market were perfectly rational.
What discount rate (WACC) should I use?
This tool calculates WACC automatically from Yahoo Finance data using the CAPM formula for cost of equity (Risk-free rate + Beta × Equity risk premium) and interest expense for cost of debt. As a rough guide: stable large-caps sit around 7–9%, growth companies 10–12%, and higher-risk businesses 12–15%. You can override the calculated value directly in the input fields.
Why does terminal value matter so much?
Terminal value (the value beyond the forecast period) often represents 60–80% of the total DCF result. This makes the terminal growth rate assumption extremely important — a 0.5% change in terminal growth can shift intrinsic value by 10–20%. When the tool flags "terminal value >70%", treat the result with extra caution and test different terminal growth assumptions.
Why does the tool show a warning for insurance and financial companies?
Insurance and bank free cash flows include large investment portfolio movements and reserve changes that aren't true "owner earnings." Raw DCF for these companies routinely overstates value significantly. The tool prompts you to enter a normalised FCF — a conservative estimate of sustainable cash earnings — and also shows P/E, P/B, and ROE as more reliable valuation cross-checks for this sector.
What do the Bear, Base, and Bull scenarios mean?
Rather than producing a single false-precision number, the tool runs three cases so you can see a range. Base uses the seeded growth and discount-rate assumptions. Bear applies lower growth and a higher discount rate (more conservative). Bull applies higher growth and a lower discount rate (more optimistic). If the current price sits below even the Bear intrinsic value, that's a strong signal; if it's above the Bull value, the stock looks expensive on these assumptions. You can edit every input and recalculate.
What is the margin of safety?
The margin of safety is the gap between a stock's estimated intrinsic value and its current market price, expressed as a percentage. A positive margin means the stock trades below what the DCF says it's worth; a negative margin means it trades above. Value investors like Benjamin Graham and Warren Buffett insist on buying with a margin of safety so that even if their assumptions are somewhat wrong, they don't overpay. The tool flags each scenario as Undervalued, Fairly Valued, or Overvalued based on this gap.
Why do banks and insurers use a different model (DDM)?
Traditional FCF-based DCF is structurally broken for financial companies. For banks, "debt" is mostly customer deposits — a raw material, not a funding source — so there's no clean free cash flow and WACC can't be derived in the usual way. For insurers, cash flow is dominated by investment-portfolio movements and reserve changes, not owner earnings. So the tool automatically switches banks and insurers to the Dividend Discount Model (DDM), which values the stock from the dividends it actually pays, discounted at the cost of equity. It also shows banking-specific metrics: P/B, P/E, ROE, and dividend yield.
How does the tool handle international (ASX, India, UK) stocks?
Add the market suffix to the ticker — .AX for Australia, .NS/.BO for India, .L for the UK — or tick the ASX / NSE box. The tool then uses the correct local 10-year government bond yield as the risk-free rate (US ~4.5%, Australia ~4.8%, India ~7.0%), a market-appropriate equity risk premium, and a sector WACC reference range for that market. Currencies are handled automatically, including the UK's pence-vs-pounds quirk. International betas are also floored (see below).
What is beta, and why does the tool "floor" it for non-US stocks?
Beta measures how much a stock moves relative to the overall market — it scales the equity risk premium in the CAPM cost-of-equity formula. Yahoo Finance computes beta against the S&P 500. For US stocks that's correct, but for Australian or Indian stocks it understates risk, because those markets don't move in lockstep with the S&P 500 — producing artificially low betas (e.g. an ASX insurer showing 0.17). The tool applies a minimum beta floor (0.5 for ASX and most international, 0.6 for India) when seeding the discount rate, and flags when it has done so. You can always override it.
What are franking credits and how do they affect Australian valuations?
Australia uses a dividend imputation system: companies pass on the corporate tax they've already paid as "franking credits" attached to dividends, which shareholders can use to reduce their own tax. In a professional DCF this is captured by a variable called Gamma (γ), which the ACCC values at 0.4–0.5. Including it effectively lowers the company's tax rate and therefore its WACC by roughly 0.3–0.8%. For ASX stocks the tool shows an explanation of this, but stays on the standard post-tax WACC by default — the conservative choice most retail investors make.
What if a company has negative or no free cash flow?
Fast-growing companies often reinvest everything and show negative FCF, which a naïve DCF can't value. The tool lets you normalise FCF from revenue × a target margin — your estimate of the FCF margin the business will earn at maturity (e.g. 15% for software, 8% for retail). It seeds this from the reported profit margin and estimates roughly when FCF should turn positive given your revenue growth. This is Damodaran's preferred approach for pre-profit growth companies. The result is clearly labelled as revenue-normalised.
What does "net debt exceeds firm value" mean?
For some capital-heavy companies (large conglomerates reinvesting aggressively, or firms carrying huge debt loads), the DCF firm value comes out lower than the company's net debt, leaving negative equity. Rather than show a nonsensical negative share price, the tool tells you plainly that the equity is worth zero on a DCF basis with the current assumptions — meaning the market is pricing the stock on future growth or asset value that a DCF on today's cash flow can't justify. Try a higher growth rate, or sanity-check that the cash flow isn't distorted by one-off items.
What growth rate and equity risk premium should I use?
The tool seeds growth from Yahoo's revenue and earnings growth, but you should sanity-check it — no company grows at 25% forever, and terminal growth should never exceed long-run GDP (~2–3%). The equity risk premium (the extra return investors demand for holding stocks over bonds) defaults to 5.5%, the long-run US historical figure from Professor Aswath Damodaran's data. Use 4–6% for stable developed markets and 7–9% for emerging markets like India. A 1% change in this input can move the valuation by 15–25%, so it matters.
How accurate is this? What are the limitations?
A DCF is only as good as its assumptions — small changes in growth or discount rate produce large swings in output, which is exactly why this tool shows three scenarios instead of one number. It works best for mature, stable, cash-generative businesses. It's less reliable for cyclical commodities (volatile earnings), early-stage companies (no FCF history), REITs (better valued on Funds From Operations), and conglomerates priced on future optionality. Treat the output as one input into your research, not a verdict. This tool is not financial advice — always do your own research and consult a licensed adviser.
Which markets and exchanges are supported?
Any ticker Yahoo Finance covers — US (no suffix), Australia (.AX), India NSE (.NS) and BSE (.BO), UK (.L), Germany (.DE), Hong Kong (.HK), and more. US, Australian, and Indian stocks get the full market-specific treatment (local risk-free rate, equity risk premium, and sector WACC ranges). Other markets work too, with a sensible default discount rate you can adjust.
Is this free? Does it store my data?
Completely free, no sign-up required. No personal data is collected or stored, and nothing runs on a server you log into — all the calculation happens in your browser. The only data sent externally is the ticker symbol you enter, which is forwarded to Yahoo Finance via a Cloudflare Worker proxy to retrieve the financial data. Your recently viewed tickers are saved locally in your own browser for convenience and never leave your device.
DCF Valuation
