Tools / Intrinsic value
Owner earnings DCFWhat is the business worth?
Add up the cash the business should hand its owners over the years, discount it back to today, then demand a margin of safety before you pay.
Where the value comes from
Sensitivity: value per share
Rows: discount rate. Columns: stage 1 growth. Teal cells sit above today's price, raspberry cells below. Your case is outlined in gold.
How this works
Owner earnings is the cash a business could pay its owners without shrinking: net income, plus depreciation and amortisation, minus the capital spending needed just to stay in place. Buffett laid out this definition in his 1986 letter. Most companies don't report maintenance capex, so many people subtract all capex to stay conservative.
The calculator grows owner earnings for two stages, discounts each year back to today at your discount rate, and adds a terminal value: the final year's owner earnings times a multiple, also discounted. Divide by the share count and you get a value per share.
Every input is a guess, so the sensitivity grid matters more than the single answer. If the stock only looks cheap in the top-left corner, it isn't cheap. The margin of safety is the cushion for the guesses you got wrong.