dcf-thinking

name	dcf-thinking
description	Discounted Cash Flow valuation with step-by-step auditable reasoning. Claude reasons through revenue projections, EBITDA margins, CapEx, working capital, WACC components, and terminal value — writing every assumption, its justification, and the sensitivity analysis into the visible output. The written reasoning is the deliverable: every assumption is auditable.

DCF Valuation (Auditable Reasoning)

What Claude does here: Builds a full DCF model step-by-step, writing every assumption and its justification into the response and the output artifact — not leaving it in internal thinking, which is never visible to the reader. Unlike a spreadsheet, each cell is explained — why this growth rate, why this margin, why this WACC. The written reasoning is as valuable as the number.

Trigger phrases

• "NVDA DCF değerlemesi yap"
• "Intrinsic value hesapla: [ticker]"
• "DCF modeli kur — [şirket]"
• "Fair value analizi: [ticker]"
• "Build a DCF for [company]"
• "Step-by-step valuation: [ticker]"

Phases

Phase 1 — Company profile & data collection

Fetch via WebSearch + WebFetch (Yahoo Finance quoteSummary):

• Current revenue, EBITDA, net income, EPS (last 12 months)
• Revenue growth rate (3-year historical CAGR)
• EBITDA margin (current and 3-year trend)
• CapEx / Revenue ratio
• Net working capital / Revenue ratio
• Current debt, cash, shares outstanding
• Beta (from Yahoo or compute vs benchmark)
• Sector median multiples for sanity check

Phase 2 — Revenue projection (5 years)

Reasoning step (write it out): Reason through growth rate assumptions:

1. Historical growth rate — starting point
2. Analyst consensus (WebSearch: "[company] revenue forecast 2025 2026")
3. Market growth rate — industry TAM expansion
4. Competitive position adjustment — gaining/losing share?
5. Macro headwinds/tailwinds — FX, rates, demand cycle
6. Management guidance — recent earnings call commentary

Output: year 1-5 revenue with explicit rationale for each year's growth rate.

Phase 3 — EBITDA margin projection

Reasoning step (write it out):

• Operating leverage: how does margin behave as revenue grows?
• Investment cycle: is the company in heavy CapEx mode (margin compression) or harvesting?
• Sector comparison: is current margin above/at/below peers?
• One-time items to strip out

Output: year 1-5 EBITDA margin with reasoning.

Phase 4 — Free cash flow build

For each projection year:

Revenue
× EBITDA margin = EBITDA
- D&A (estimate from CapEx trend)
= EBIT
× (1 - tax rate) = NOPAT
+ D&A
- CapEx (% of revenue, declining from heavy investment phase)
- ΔNWC (% of revenue growth × NWC/Revenue ratio)
= Free Cash Flow to Firm (FCFF)

Tax rate: use effective rate from financials (typically 20-28% for US, 22% for Turkey).

Phase 5 — WACC computation

Reasoning step — each component justified in the output:

Cost of equity (CAPM):

Ke = Rf + β × (Rm - Rf) + country_risk_premium

• Rf: current 10-year US Treasury (WebFetch or state assumption)
• β: from Yahoo or estimated
• Equity risk premium: 5.5% (US), 6.5% (Turkey/EM)
• Country risk premium: 0% (US), 3-5% (Turkey)

Cost of debt:

Kd = (Interest expense / Total debt) × (1 - tax rate)

WACC:

WACC = (E/V) × Ke + (D/V) × Kd

Where E = market cap, D = net debt, V = E + D.

Sanity check (state it in the output): Is this WACC reasonable for this sector? Compare to sector WACC range. Flag if >15% or <6%.

Phase 6 — Terminal value

Gordon Growth Model:

TV = FCF_year5 × (1 + g) / (WACC - g)

Terminal growth rate g: typically 2-3% (GDP growth, conservative).

Exit multiple cross-check:

TV_check = EBITDA_year5 × EV/EBITDA_exit_multiple

Exit multiple = current sector median. If TV_GGM vs TV_check differ > 30%, explain why.

Phase 7 — Enterprise value → equity value

Enterprise Value = PV(FCF year 1-5) + PV(Terminal Value)
  [discount each year's FCF at WACC]

Equity Value = EV - Net Debt
Intrinsic value per share = Equity Value / Diluted shares outstanding

Upside/downside vs current price = (Intrinsic - Current) / Current × 100%

Phase 8 — Sensitivity analysis

Build a 3×3 sensitivity table:

	WACC - 1%	WACC	WACC + 1%
g + 0.5%
g
g - 0.5%

And a revenue growth sensitivity:

	Growth - 3%	Base	Growth + 3%
Margin - 2%
Base margin
Margin + 2%

Phase 9 — Bull / base / bear valuation

Scenario	Key assumption	Intrinsic value	Upside
Bear	Low growth, margin compression, high WACC
Base	Consensus assumptions
Bull	High growth, margin expansion, low WACC

Phase 10 — Output

Write output/dcf-<ticker>-<YYYYMMDD>.md:

# DCF Valuation: <Company> (<Ticker>)

## Summary
Intrinsic value: $X | Current price: $Y | Upside: Z%
Verdict: UNDERVALUED / FAIRLY VALUED / OVERVALUED

## Key Assumptions (with reasoning)
## 5-Year Projections
## WACC Derivation
## DCF Computation
## Terminal Value
## Sensitivity Analysis
## Bull / Base / Bear
## Comparison to Market Multiples
## Risks to the thesis

Disclaimer: DCF is highly sensitive to assumptions. Small changes in WACC or terminal growth rate produce large value swings. Not investment advice.