Welcome to Reverse DCF page to understand market expectations about your interested Stock
Reverse DCF is a method to determine implied growth rate or future cash flows from a company's stock price. It involves working backwards from the market price to estimate the assumptions behind it. By applying this analysis, investors can assess if the stock is overvalued or undervalued based on their own analysis.
More info here: Investopedia
You will need two key inputs for getting the growth rates market is expecting from your favorite company.
marketcap or stock price of the stock: e.g for AAPL 177 is stock Price as 11 Aug, 2023
sustained cash flow or free cash flow of the stock OR per share fcf/eps for the stock, e.g: EPS of AAPL is 6.11 in FY 2022
Note:
We are taking operating cashflows as input here, assuming in the long term we will get 100% of these to shareholders
Ideally the value should be: operating cashflows - maintenance capex + capitalized r&d - (dilution due to share issuance's/stock compensation)
Description Info: Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems. Headquartered in Wilmington, Massachusetts.
Understand the unit economics and market potential
Check why Customers love it? is it a low-cost producer and provide quality products
Do a Customer study: by asking - Can you imagine doing your job without the Company Products? How is the Competition products?
Ask Customers - Why is it better than other products in the market
The Business needs to provide value to Customers at the end of day by improving productivity(save time) and scaling the user to do more and be cheap
The most important: Does the current management have Skin in the Game, if stock drops will they be impacted, if no: run away from the Stock: ADI
1. (new)Reverse DCF based on cashflow:operating(operating cash flow) for ADI price: 176.27 as of date: 2025-04-18 [show/hide charts] Current Market Price: 176.27 as of 2025-04-18
T means Trillions, B means Billions, M means Millions, all values are in USD(or company filed currency) if not specified as percent/number in the Entry column
Disclaimer: Data is provided as is, please do your due diligence before making any investments, Markets can be very volatile!
In this report, we are doing Reverse DCF assuming for today's current price: 176.27 to meet market expectations, what growth rate company should grow for next 10 years? Each row can be thought as 1. After 10 years from today - if PE of the stock is X, what should be the growth rate from today to meet that PE in future 2. lower PE in future is a reasonable justification, higher PE in future is risky 3. Assumptions: We are using discount rate as 10%, Period as 10 years and Reinvestment Rate of 100% in the default report, overriding will change this values 4. You can override values by passing the input data as a query param to the URL 5. direct link: reverse dcf for ADI 6. override link: reverse dcf with override in URL for ADI 7. inf values means, cashflow::operating is negative or we do not have data for the stock/ticker
2. Showing REVERSE_DCF_RAW report for ADI [show/hide charts] Current Market Price: 176.27 as of 2025-04-18
T means Trillions, B means Billions, M means Millions, all values are in USD(or company filed currency) if not specified as percent/number in the Entry column
Disclaimer: Data is provided as is, please do your due diligence before making any investments, Markets can be very volatile!
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