How to Use a DCF Calculator (With an AAPL Example)

Discounted cash flow (DCF) analysis estimates what a stock is worth today based on the cash it is expected to generate in the future. It is one of the most widely used valuation methods, and you do not need a spreadsheet to run one.

What a DCF calculator needs

Most DCF models boil down to five inputs: projected free cash flow, how fast that cash flow grows, how many years you forecast, a discount rate (your required return), and shares outstanding. Change any assumption and the intrinsic value per share moves.

• Free cash flow (FCF), cash left after operating and capital expenses
• Growth rate, expected annual FCF growth during the forecast period
• Forecast years, commonly 5–10 years
• Discount rate, often 8–12% for large-cap stocks; higher for riskier names
• Terminal growth, long-run growth after the forecast (usually 2–3%)

Worked example: Apple (AAPL)

Suppose AAPL generated roughly $100B in free cash flow last year. You expect 8% growth for five years, then 2.5% terminal growth, and you require a 10% return. Plug those into the calculator, add ~15.5B diluted shares, and you get an estimated intrinsic value per share.

Compare that estimate to the live AAPL quote on our stock research page. If intrinsic value is well above the market price, the model suggests the stock may be undervalued, but only if you believe your growth and discount assumptions are reasonable.

Common mistakes to avoid

1. Using revenue instead of free cash flow, DCF values cash, not sales
2. Setting growth too high for mature companies, be conservative
3. Ignoring share count, buybacks shrink shares and raise per-share value
4. Treating the output as a price target, DCF is a range, not a prophecy

Save your analysis in Endval

After running a DCF, track the stock in Endval to monitor how the market price compares to your estimate over time. The AI assistant can answer questions about your cost basis, allocation, and whether AAPL still fits your portfolio mix.