Reverse DCF Calculator
A forward DCF asks "what's it worth?" A reverse DCF asks the more useful question: at today's price, what free-cash-flow growth is the market already paying for? Plug in the price and the discount rate, and solve for the expectation baked in — then judge whether it's reasonable through the cycle.
Inputs
Market-implied FCF growth (explicit period)
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Sensitivity
Implied explicit-period FCF growth across discount rate (rows) and terminal growth (columns). The center cell is your inputs.
How it works
The idea. Price already embeds an expectation. A reverse DCF holds the discount rate and terminal growth fixed, then solves for the single explicit-period FCF growth rate g that makes the discounted cash flows equal today's market cap. That g is what you're being asked to believe.
The math. Market cap = Σ FCF₀(1+g)ᵗ ⁄ (1+r)ᵗ for t = 1…N, plus a Gordon terminal value FCF_N(1+gₜ) ⁄ (r − gₜ), discounted back N years. We binary-search g until the present value matches price × shares.
How to use it. If the implied growth is far above what the business has ever sustained through a full cycle, the stock is priced for perfection. If it's below trend, expectations are beatable. This is the reality check behind every through-cycle thesis — pair it with the forward DCF and the comps to triangulate.
Equity-FCF (FCFE) framing: base FCF is treated as cash flow to equity, so the implied value is compared directly to market cap. Nothing here is investment advice. Built by Brandon Leon — independent research focused on cyclical industries.