Educational tool. Nothing here is investment advice or a personal recommendation, and no one behind this tool is authorised by the Financial Conduct Authority. Every figure on this page comes from your own inputs and your own assumptions; company data is third-party and may be wrong or out of date. Companies can be worth far less than any model suggests. Your capital is at risk. Nothing you type leaves this device.

Valuation Workbench

Learn to value a US-listed company the way analysts do, for yourself. The workbench pulls the published numbers and the forecasts, you choose the multiples, and it shows you what your choices imply. Profitable companies are valued on earnings; companies with no profit yet on revenue, with a reality check on what today's price assumes. The range is yours, not ours.

Start here

Enter a US ticker (NYSE or Nasdaq). The company's latest annual figures are pulled from Financial Modeling Prep using your own free data key, which stays on this device.

Your assumptions

The main method is the one most professional analysts use: next year's expected figure multiplied by a multiple. The multiple is the whole judgement, so you choose it. Nothing is set until you set it; each slider starts grey.

Lowest multiple you think is fair Times next year's earnings. The floor of your range.
Drag to set
Highest multiple you think is fair The ceiling of your range. The gap between the two is how unsure you are.
Drag to set
A multiple is a bet on how long growth lasts and how safe it is. The market average has spent most of the last century between about 15 and 25 times.
How much margin for being wrong? A discount you demand from your own estimate. The less certain you are about the numbers above, the bigger it should be.
Drag to set
The Lounge's education material discusses margins in the region of 15% for established companies rising to 40% or more for speculative ones. Your call.
Cross-check with cash flows (secondary)

A multiple is a shortcut. The cash flow model asks what the business is worth from first principles and usually gives a lower, wider answer for fast-growing companies. Use it to see what your multiple is assuming.

How fast do you think it grows? Free cash flow growth per year for the next five years, then fading to half that for years six to ten.
Drag to set
What return do you demand for the risk? Your discount rate. Larger, steadier companies usually justify a lower number; smaller or unproven ones a higher one.
Drag to set
Long-run US equity returns have historically been in the high single digits a year. Above 12% you are demanding a return few established companies can clear, which pushes every value down sharply.
Show the workings

The company

Pulled figures are outlined in blue. Anything you edit becomes yours. Report figures are in millions of US dollars.

The methods

Switch on the methods that fit the company. A loss-making company with no dividend will only suit some of them, and that is itself a finding. Amber fields hold an illustrative default you have not yet made your own.

Forward earnings times a multiple

The sell-side method. Driven by the lens, the expected-figure box and the two multiple sliders above; the value carried into the table is the midpoint of your two multiples.

Discounted cash flow

Values the company as the cash it can generate over ten years plus a terminal value, discounted back to today. The growth and return sliders above write into this section.

Generic starting points, not a view on this company.

Dividend discount

Only meaningful for companies with a steady, growing dividend.

Asset based

What is left for shareholders if the balance sheet were settled today. Useful for banks, property and holding companies; weak for software or brands.

Relative value

Applies a multiple to the company's own numbers. Pulled multiples are the company's own five-year averages; a peer average is often the better argument, so consider replacing them.

Analyst consensus

Third-party opinion, usually on a 12-month horizon, and it tends to follow the share price rather than lead it. Not pulled automatically; copy it from your broker if you want it, and record where it came from. It is kept out of the range at the top.

Bringing it together

The methods will disagree. That gap is information: it tells you which assumptions the value depends on. Weight the methods by how well they fit this company.

MethodValue per sharevs priceWeight

Things to sit with

Before you write a number down anywhere, answer these in your own words.

    Your workings

    Saved in this browser only, on this device. Clearing your browser data removes them. Nothing is sent anywhere.

    Show the text summary