Understanding Discounted Cash Flow (DCF) Valuation
Worked Example: These Figures Today
The companies used as examples above, with the current figures behind them. Illustrations of the metric — not a ranking, not a shortlist, and not a recommendation.
| Ticker | Company | Price | Change | Market Cap | MoonshotScore |
|---|---|---|---|---|---|
| AAPL | Apple Inc. | $343.91 | -1.10% | $5.0T | 89 |
| MSFT | Microsoft Corporation | $532.60 | +1.54% | $4.0T | 85 |
| NVDA | NVIDIA Corporation | $216.00 | +2.39% | $5.2T | 97 |
Shortlist: DCF Valuation Examples
“MoonshotScore V2는 NASDAQ, NYSE, AMEX에 상장된 적격 보통주와 ADR을 업종 내 상대 평가를 위한 다섯 가지 축으로 평가해 0~100점을 부여합니다. ETF, OTC 종목, 미국 외 거래소 상장 종목은 대상이 아닙니다. V2 점수가 없어도 기존 V1으로 대체하지 않습니다. 투자 조사 지표이며 매매 권고가 아닙니다.”
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.