Stock Evaluator methodology
DCF calculator using SEC financial statements
The Stock Evaluator converts public financial information into a range rather than a single precise answer. The baseline is system-calculated, the assumptions remain visible, and user changes are retained as a separate scenario.
1. Point-in-time financial foundation
The calculator selects SEC filings and Company Facts available as of the analysis date. Revenue, operating profit, depreciation, capital expenditures, taxes, debt, cash, shares, and other required facts are normalized without treating missing values as zero.
2. Data-driven operating forecast
Revenue growth starts with recent reported growth and a longer historical compound rate. When sufficiently supported forward revenue estimates are available near the current date, the first forecast years use that evidence. Growth and EBITDA margin transition to normalized steady-state levels by Year 5, then remain stable through the terminal period.
3. Free cash flow to the firm
The model estimates unlevered free cash flow from operating earnings after cash taxes, plus depreciation, less capital expenditures and the investment in operating working capital. Cash taxes transition from the current effective rate to a five-year historical median by Year 3. When five usable positive-tax years are unavailable, the disclosed long-run assumption is 21%. This produces enterprise value before debt and cash are reconciled to equity value.
4. Discount rate and timing
The weighted average cost of capital combines an evidence-based cost of equity with the after-tax cost of debt and the company capital structure. Cash flows use a mid-year convention so the model does not assume every dollar is received only on the final day of each forecast year.
5. Terminal value and sensitivities
Terminal value uses a perpetual-growth calculation where the discount rate must exceed terminal growth. Two tables show how implied share value changes across revenue-growth and WACC combinations and across terminal-growth and terminal-WACC combinations. The terminal-value share and implied exit multiple provide additional reasonableness checks.
6. Your DCF scenario and range comparison
Scenario controls calculate a separate DCF using your edited assumptions and the same P10/P50/P90 simulation. Earlier controls are retained unless changed or cleared. Calculated discount rates use beta and market inputs; manual rates replace that calculation. The original and latest user DCF remain as separate weighted estimates. They use the same method with different assumptions and are not independent evidence. A later recalculation replaces the current user estimate; prior scenarios remain only in the audit history. Weight-only edits change the blend, not the underlying ranges. The comparison chart uses a shared price axis; its low, mid, and high markers reflect each estimate’s own range definition, not equivalent confidence intervals or guaranteed future prices.
7. Independent valuation cross-checks
Historical P/E pairs annual reported EPS with the first trading close after filing, aligned for splits, and applies the historical multiples to a positive current earnings base. Public comparables use EV/Revenue and EV/EBITDA. One or two usable peers, or fewer than five P/E observations, still produce a limited-data indication. Sparse samples use observed min/median/max; a single observation is a point estimate. Base weights are reduced by usable peers ÷ 3 or P/E observations ÷ 5 (capped at 100%), then normalized. Annual-earnings fallbacks and unusual P/E multiples each halve the P/E weight again. These are disclosed coverage rules, not confidence probabilities. A 52-week range remains market context rather than an intrinsic-value estimate.
How to interpret the result
Compare the DCF with the historical P/E and public-comparable ranges, then inspect the sensitivity cells around the current market price. Wide disagreement is a signal to review assumptions and source quality, not an invitation to average away meaningful differences.
The output is an analytical aid, not investment advice or a fairness opinion. SEC and market sources can be incomplete or delayed, and the future can differ materially from any forecast.
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