Reverse DCF Calculator: How Much Growth Is Priced In
Enter price, shares, and free cash flow to back out the growth rate the market is quietly assuming. For education, not a buy or sell call.
A normal valuation guesses future cash flow first, then works out what the company is worth. A reverse DCF flips the question: at today’s price, how fast is the market assuming this company will grow?
I usually check this number before deciding whether a stock looks expensive. It’s easier to reason about than “40 times earnings,” because it tells you what the company has to deliver for the price to hold up.
An example: a $150 share price, 50 million shares, $300 million of free cash flow last year, a 9% discount rate, 2.5% terminal growth, and a 10-year horizon. The market is pricing in about 8.6% growth a year. Your turn: can this company pull that off?
The sensitivity table nudges the discount rate and terminal growth up and down so you can see how much the answer moves. The number is the assumption behind the price. It isn’t a forecast, and it isn’t advice to buy or sell.
The tool’s interface is in Traditional Chinese. The seven fields, top to bottom, are: share price, shares outstanding (millions), last-year free cash flow (millions of USD), net cash (millions of USD, can be negative), discount rate (%), terminal growth (%), and forecast years.
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