Fair Value Calculator - Know the true value of a stock!

Use following free calculators and our database to determine the fair value of a stock. 

We have already calculated thousands of stocks in our database and prepared other useful tools for determining the true value of a stock.


Free Fair Value Calculators:

1. Simple Fair Value:
Insert the Earnings Per Share (EPS) & revenue growth (%) into the approximate fair value calculator and get the approximate true fair value (intrinsic value) of the stock.

 

2. Advanced Fair Value:
Our advanced calculator enables you to derive a precise fair value of the stock in consideration. Using various financial metrics like EPS, Cash Flow per Share, Earnings per Share Growth, Revenue Growth, Return on Equity, EBIT Margin & book value per share.

 

3. Auxiliary Calculators:
Our Auxiliary calculators complement our main calculators by adding a layer of historical average on the main calculators. By using historical averages to adjust the fair value derived from the main calculators, we aim to eliminate any short term errors that might have crept in. Investors however have the freedom to calculate their own average numbers or simply use the last available key figure.

 

The required key figures for various fundamental analysis can be found on relevant stock market websites like Yahoo Finance. One can enter the name of the stock and find the required data under the “fundamental ratio/financials” tab. Our premium membership eliminates all this hassle for you by providing you all the numbers in one place so all you got to do is simply evaluate and make the decision.

1. Simple Fair Value Calculator:

Insert EPS and Growth into this calculator to get the approximate fair value of the stock. Use the earning per share and for growth the annual increase of revenue in %.

Guidelines for using the Fair Value Calculator:

  • EPS should be between 1 and 15, growth must be at least 2%.
  • The fair value is stated in the currency in which the EPS is entered. 

determine the fair Value and invest in undervalued stocks for enhanced return

Fair Value stock chart

Our premium membership allows you access to our vast repertoire of fair value calculators that will allow you to determine the fair value of the stock in consideration and determine its undervaluation/overvaluation.

Markets tend to converge on fair value over time and an undervalued stock will soon find its market price rising to meet its fair value.

One can use Yahoo Finance to get fundamental data and use our free manual calculators below to get fair value of the stocks they are looking at. Alternatively our premium membership will do this job for you hassle free.

Fair Value example
example for fair value calculation



2. Advanced Fair Value Calculator

Insert the Earnings Per Share, Cash Flow Per Share, Earnings Growth in %, Revenue Growth in %, Return on Equity in %, EBIT Margin in % and Book value per share into this advanced calculator to calculate a detailed and precise fair value by yourself.

Kindly note that while calculating fair value of a stock in a foreign currency, the same must be converted to EURO and EURO values are to be inserted into the respective fields. Once the fair value is received, it can be reconverted into the original currency. All entered values must be positive and at least 0.1



3. Auxiliary Calculators for EPS & Growth

The auxiliary calculators determine the average of the EPS and the revenue growth. The results are entered into the calculators above.

The influence of historical data over several years makes the result more accurate. All entered values must be positive and at least 1!

Average number Calculator

Average Grwoth Calculator



Find key data & example for advanced calculator

WHERE CAN I FIND THE REQUIRED FIGURES FOR THE Advanced FAIR VALUE CALCULATOR?

Our free manual calculators require fundamental data as input which can be sourced from the finance portal of your choice. In our example we have used Yahoo Finance (finance.yahoo.com) as our portal for sourcing information about Apple Inc. Look out for the tabs “Financials” and “Statistics” to get a list of annual values and key figures respectively.

 

Our Premium membership saves you all the hassle by loading all the needed information directly from our database so that calculation of fair value requires only a click of a button!

Earnings per Share

One can find the EPS of a company on the financial tab at Yahoo Finance under the header of “Reported EPS”. Use the diluted EPS and try to calculate an average value for the past few years. In our example of Apple, an EPS of 11 would be the average. One can use our range of auxiliary calculators to derive a precise value for the average as well.

Apple diluted EPS

Cashflow per share

Cashflow per share: Go to "financials" and switch to "Cash Flow". Look for the Free Cash Flow and divide the Free Cashflow through the number of outstanding stocks. You find the number of outstanding stocks on the "Statistic" page at "Share Statistics".

The result will be the Cashflow per Share. For Apple the Cashflow per share should be about 14 for 2019.

Free Cashflow 2019: 63.97B / Shares Outstanding 4.3B = Free Cashflow per Share of 14,87.

operating cashflow Apple
shares outstanding apple

Growth Earning per share (EPS)

Growth EPS: To define the growth of the earnings per share paste the Diluted EPS numbers (you used before) for every year into the average auxiliary calculator on this site. The result of EPS growth will be 21.16%

average growth rate earnings apple

Growth Revenue

Growth Revenue: To define the revenue growth got to the "Financials" page on Yahoo finance again. Here you can find the Total Revenue.

revenue growth apple

Now you have to paste the revenue number for every year again into the growth calculator on this site. In this case we used the TTM value as the latest number. The result for the average revenue is therefore 11.36%

Revenue growth calculator apple

Return on Equity, EBIT Marge and Book Value per Share

Return on Equity: To find the Return on Equity switch to the tab "Statistics" on Yahoo finance. Under the point "Management Effectiveness" you find the Return on Equity (ROE) is 56%.

EBIT Marge: Look for the Data "Operating Margin" on the same page. This figure is a bit higher than 24%.

Book Value per Share: This metric is also shown on the same Page. In the example of Apple its 20. 


Insert data into advanced fair value calculator

Now paste the fundamental key data of Apple into the advanced fair value calculator. The calculator will give you the fair price of Apple.

Fair Value Apple calculator analysis

 

 

If you did it correctly, the calculator will show you the Fair Value of Apple Inc. My result for the fair value of Apple is 281.57 USD

 

Note: The fair value displayed will be in the same currency that was used for EPS and Cashflow per share. The final step is to compare the calculated fair value of the stock with the traded price of the stock.

 

In our case, Apple was trading at 240 USD on that day making it fairly undervalued and attractive for purchase. This is the essence of value investing. Find value stocks trading at a price lower than fair value and purchase them. These stocks are likely to perform better as they appreciate to their fair value.

Our premium membership makes this process easier and simpler for investors of all age groups and across a broad spectrum of experience. We also provide tons of tools and stock screeners to filter and sift through thousands of stocks across the world.

 


further instructions, tips and exceptions

  • All data used in the fair value calculator must be positive with minimum value of at least 0.1 If a fundamental figure is negative, try to use the average value of that same data point from past several years.

  • Try to avoid the use of numbers that significantly deviate from the previous year’s numbers. These are exceptional cases and exceptional cases do not determine fair value. The result will be much more accurate and realistic if the numbers are homogeneous in their nature.

  • Larger the length of period used to calculate average data, the better. Accuracy is greatly improved if longer time periods are taken into consideration while calculating average.

  • Avoid companies with negative growth or no income. Focus on good quality companies that are in profit and growing their revenue.

  • Any abnormality in the fundamental data of a company warrants further investigation. Exceptions tend to be one time affairs but if this abnormality is seen consistently it could indicate some problems in the firms operations. For e.g. if revenue is growing strongly across the years but margins are decreasing significantly, it means that the company is sacrificing profits to push sales and is not something you want in your investments.

  • Use our tools as a supplement to your investment decisions. Investing is like the mixture of art and science. While we provide numbers for the science part, the art part comes from the human element, i.e. you as an investor. Trust your instinct and study the company and its operations to make a judgment call on the future of the company. Only when the numbers and your judgment aligns together, will the investment have any conviction and hope of generating returns.


How to Calculate a stock's Fair Value (intrinsic value):

We have seen how to calculate the fair value of any stock using the example of Apple Inc. I will now show you how the process went in an easy to understand flow chart. Investing is complex and is made complicated by fancy words and convoluted languages of experts. Using our tools at the Fairvalue-Calculator, your investment journey is not only simplified like the flowchart, but also made easier and potentially more successful than it could have been.

How to calculate a stocks fair value

Our Premium Database contains all the information you could ever require about the stocks you are evaluating making it easy for you to make your investment decision and then go about your daily life without having to doubt your decision. We calculate fair values using several different formulae and provide you with key figures along with industry comparison and average numbers. Our premium members get to access this database and its related calculations regarding any stock from anywhere in the world as many times as they want. There are NO RESTRICTIONS!! Check out all the advantages within the Premium Membership or learn about our value strategy here.