| name | dcf-valuation |
| description | Build a discounted cash flow valuation - project free cash flow, discount at WACC, add terminal value, and run sensitivity. Use when estimating intrinsic value. Output is an estimate, not a fact. |
dcf-valuation
Intrinsic value from projected cash flows - only as good as its assumptions, so expose them.
Process
- Historicals (sourced): revenue, margins, capex, working capital, tax rate from the filings.
- Project unlevered FCF over an explicit horizon (5-10y): revenue growth -> EBIT -> NOPAT -> + D&A
- capex - change in NWC. State each assumption.
- WACC: cost of equity (CAPM: risk-free + beta x ERP) and after-tax cost of debt, weighted. Show inputs.
- Terminal value: Gordon growth (perpetuity g) or exit multiple - sanity-check both; TV often dominates.
- Discount FCFs + TV to PV; bridge enterprise value -> equity value -> per share (net debt, shares).
- Sensitivity: a WACC x growth (and TV) table - give a value RANGE, not a single number.
Output
- The model assumptions, the FCF build, WACC, terminal value, the implied value RANGE per share, and the
sensitivity table. Labeled an estimate with assumptions stated.
Guardrails
- Forward figures are projections - label them, state assumptions (
projection-guard/projections-assumptions).
- Re-derive the math (DCFs are multi-step - AI errs); historicals sourced; report a range, not false precision.
- Not a recommendation without a disclaimer (
no-investment-advice).
