Understanding Discounted Cash Flow (DCF) Valuation
Worked Example: These Figures Today
The companies used as examples above, with the live figures behind them. Illustrations of the metric — not a ranking, not a shortlist, and not a recommendation.
| Ticker | Company | Price | Change | Market Cap | P/E | MoonshotScore |
|---|---|---|---|---|---|---|
| AAPL | Apple Inc. | $332.61 | +1.85% | $4.9T | 37.5 | 89 |
| MSFT | Microsoft Corporation | $492.44 | +0.16% | $3.7T | 27.4 | 85 |
| NVDA | NVIDIA Corporation | $218.36 | -2.37% | $5.3T | 27.5 | 91 |
Shortlist: DCF Valuation Examples
“Le MoonshotScore est une note transparente de 0 à 100. Les actions ordinaires cotées aux États-Unis sont notées par rapport à leurs pairs sectoriels selon cinq piliers — qualité de l'activité, solidité financière, valorisation, durabilité de la croissance et momentum — tandis que les ETF, les titres OTC et les valeurs étrangères utilisent un modèle hérité à neuf signaux. Il est conçu à des fins éducatives et pour une diligence raisonnable approfondie, et non comme un conseil financier.”
Questions worth resolving before acting on the screen
What is the key advantage of using DCF valuation?
DCF valuation focuses on a company's fundamentals rather than market sentiment, providing a more objective view of its intrinsic value.
What are the limitations of DCF valuation?
DCF models are sensitive to input assumptions, such as growth rates and discount rates, which can significantly impact the valuation outcome. It also does not account for unpredictable events.
How does the discount rate affect the DCF valuation?
A higher discount rate reduces the present value of future cash flows, resulting in a lower valuation, and vice versa. The discount rate should reflect the risk profile of the investment.
How often should a DCF valuation be updated?
A DCF valuation should be updated whenever there are significant changes in a company's fundamentals, market conditions, or the investor's required rate of return.