Reverse DCF Calculator
Our free Reverse DCF Calculator (Reverse Discounted Cash Flow Calculator) helps you determine what growth rate would be needed to justify a stock's current market price. This powerful tool is essential for value investors looking to understand market expectations. Save and manage multiple calculations for different stocks, with automatic saving and easy switching between calculations.
Reverse Discounted Cash Flow Calculator
Understanding Reverse DCF Analysis
Reverse DCF analysis is a powerful valuation method that works backwards from a stock's current market price to determine what growth rate and assumptions would be needed to justify that price. It helps investors:
- Identify if a stock's price is reasonable
- Understand market expectations for future growth
- Make more informed investment decisions
Alternate Valuation Methods
While reverse DCF analysis is excellent for understanding market expectations, other valuation methods may be more appropriate depending on your analysis goals:
Traditional DCF Analysis
For forward-looking valuation based on your own growth assumptions, traditional DCF analysis may be more suitable. It helps you determine what you think a company is worth based on your projections.
Try our DCF CalculatorDividend Discount Model (DDM)
For companies with stable and predictable dividend payments, the DDM method may be more appropriate. It values a company based on its projected future dividends.
Try our DDM CalculatorFrequently Asked Questions
What is a reverse DCF calculator?
A reverse DCF calculator works backwards from a stock's current market price to determine what growth rate and assumptions would be needed to justify that price. This helps investors understand if the current price is reasonable and what the market is expecting for future growth.
When should I use reverse DCF analysis?
Reverse DCF analysis is particularly useful when you want to understand market expectations for a stock's future growth. It helps you determine if the current price is justified by reasonable growth assumptions or if the market is being too optimistic or pessimistic.
How accurate is the reverse DCF calculator?
The accuracy of the reverse DCF calculator depends on the quality of your inputs and assumptions. While it provides valuable insights into market expectations, it should be used alongside other valuation methods and fundamental analysis for a complete investment evaluation.
How do I save and manage my Reverse DCF calculations?
Our Reverse DCF Calculator automatically saves your calculations in your browser's local storage. Each calculation is saved with a name based on the stock you're analyzing. You can easily switch between different calculations using the cards at the top of the calculator, and delete any calculations you no longer need. Your saved calculations will persist even if you close your browser, making it easy to return to your analysis later.
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