Perform discounted cash flow valuation with free cash flow projection, WACC, terminal value, and sensitivity analysis table.
This tool builds a discounted cash flow valuation from your assumptions: it grows free cash flow at the rate you enter, discounts each future year back at WACC, adds a terminal value for the years beyond the forecast, subtracts net debt, and divides by shares outstanding to get an intrinsic value per share. A sensitivity table shows how that value moves as WACC and growth vary. What most users get wrong is where the value comes from: in a typical run the terminal value supplies roughly three-quarters of the total, so the WACC and terminal growth you enter matter more than the five-year projection.
A concrete input and expected output from the current implementation.
Input
Free cash flow: $100M; growth rate: 8% for 5 years; WACC: 10%; terminal growth: 3%; net debt: $100M; shares outstanding: 50M.
Expected output
Fair value per share: $34.32. Present value of the five forecast years: $473.4M; present value of the terminal value: $1,342.4M; enterprise value: $1,815.8M; equity value: $1,715.8M. Sensitivity table: at 9% WACC with the same terminal growth, the value rises to about $40.52 per share.
Each projected cash flow (108.0, 116.6, 126.0, 136.0, 146.9) is discounted at 10% and summed to 473.4. The terminal value (151.3 divided by 0.07, or 2,162.0) is discounted back five years and added, net debt is subtracted, and the remainder is divided by 50 million shares.
Enter current free cash flow, a growth rate, and a forecast horizon. Each year's cash flow is grown at that rate, then discounted to present value at WACC: PV equals FCF for the year divided by (1 + WACC) raised to the year number. The tool sums those present values into the value of the explicit forecast period.
Beyond the forecast horizon the tool applies a Gordon growth terminal value: last forecast year's cash flow times (1 + terminal growth), divided by (WACC minus terminal growth), discounted back to today. Enterprise value is that plus the forecast sum. Subtracting net debt gives equity value; dividing by shares outstanding gives value per share. The table reruns the whole calculation across a grid of WACC and growth rates.
Most often an assumption, not the market. The terminal value divides by (WACC minus terminal growth), so a low WACC or a terminal growth rate close to the WACC multiplies the answer. Make sure the cost of debt inside WACC is after-tax: using the pre-tax rate makes WACC too high and the fair value too low. The sensitivity table shows which input is driving the result.
No single true value exists. The tool computes the value implied by your inputs, and two reasonable analysts with different growth and WACC assumptions routinely land 20-40% apart. Treat the sensitivity table as the range of plausible values and compare that range against the market price, rather than acting on the single point estimate.
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