Stock intrinsic value calculator
Estimate what a share might be worth with Benjamin Graham's classic formula. A starting point for your own thinking, not a recommendation.
Enter the numbers on the left and press Calculate to see the result here.
How it works
The classic Graham formula estimates what a share is worth from its earnings, how fast earnings may grow, and the return available on safe corporate bonds.
Intrinsic value = EPS x (8.5 + 2 x growth rate) x 4.4 / current AAA bond yield
The 8.5 is the price-to-earnings ratio Graham gave a business with no growth. The 4.4 was the average AAA bond yield when the formula was published, so dividing by today's yield adjusts for interest rates.
Worked example
EPS of 3.50, expected growth of 8% a year and a bond yield of 4.4% give an intrinsic value of 3.50 x (8.5 + 16) x 4.4 / 4.4 = 85.75. A 25% margin of safety brings the price you would be comfortable paying down to 64.31.
Where to find the inputs
EPS is in a company's income statement or annual report. Growth is your own estimate, and it is the input that matters most. For the bond yield, use a current high-grade corporate bond yield in the currency you are working in.
Important limitations: please read
This is a simplified formula from a different era. It ignores debt, cash, industry, competitive position and management quality, and it depends heavily on the growth rate you enter, which is the hardest number to estimate honestly. Small changes in growth swing the answer a lot. The calculator uses no live market data: every number is exactly what you typed in.
Tell us what you are working on.
Send a short message. We reply, agree what you need, and set a time to talk. Intro calls are free and carry no obligation.