Stock Valuation Tool

I just ran across a pretty neat tool to do a quick estimate of a stock’s value. All you have to do is enter the stock symbol at ValuePro, and an estimate of the stock’s intrinsic value is displayed along with a detailed list of the inputs used to estimate that value. You can change any of the inputs to refine your estimate. I recommend that you check all the inputs, because the data source used for this website is not always up to date or accurate.

You can review the details of the cash flow forecast by clicking on the “Cash Flows” button, and examine all the different calculations involved. The valuation technique used in this tool is the discounted cash flow to the firm (DCFF) method. You can get additional information regarding ValuePro’s online tool at their FAQ page. Note that this tool does not work well for financial companies and real estate investment trusts.

I’m not a big fan of the DCFF valuation method since it focuses on a company’s perspective and not the shareholder’s perspective regarding the value of the company. I prefer the discounted cash flow to equity method of valuation (DCFE). But regardless, this tool can still be pretty handy to quickly evaluate the reasonableness of a stock’s price.

Let’s try a few examples. I have been interested in Microsoft (MSFT) lately. ValuePro estimates that the intrinsic value of Microsoft’s stock is $31.05. Microsoft closed today at $27.44. In contrast, eBay (EBAY) closed today at $94.41 per share, but ValuePro estimates that the intrinsic value of the stock is $82.52. That estimate is only if you believe that eBay can grow at 35% per year for the next ten years. If you reduce the growth rate to 20%, the intrinsic value of eBay’s stock drops to $29.51.

One thought on “Stock Valuation Tool

  • October 24, 2019 at 5:11 pm
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    Great Post! Automated stock valuation tools are a great way to get an estimate of a company’s value. As you mentioned, it’s always a good idea to thoroughly evaluate the inputs into the model, and adjust the inputs if necessary.

    We’ve used the ValuePro tool before, but we found there were several issues with lots of the automated valuations. For example, They are currently calculating an intrinsic value of $1,670 per share for AAPL, which isn’t realistic based on the total market value, and their current market share.

    We recently developed an online valuation model (along with investing checklists) that automates a lot of the analysis. Our automated stock valuation models are free to use, and can greatly speed up the process of calculating a company’s intrinsic value.

    Here is a link if you’d like to check it out: https://www.discoverci.com/companies/AAPL/stock-valuation.

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