Calculating Intrinsic Stock Value in Excel

September 17, 2016

What is it worth? Will I pay too much? How much price safety should I build into my buy price? How does its fair value compare to the value of other opportunities? At what price should I consider selling it? Is it priced as a bargain or it is greatly overpriced?

We are talking about the intrinsic value per share of a stock as a measure of its worth—a value free of emotions or other biased influences. It is the value a knowledgeable owner would sell to a knowledgeable buyer. The biasing influences one can encounter include psychology, expectations, insider information, manipulation, current events, erroneous assumptions, etc.

In this article, I describe an Excel spreadsheet that I designed in order to estimate the unbiased worth of a company and, subsequently, its intrinsic value per share. The model gives an investor the ability to perform independent analysis in order to determine whether the stock’s intrinsic value exceeds the market price by a comfortable margin of say 15%, even 80% or more. This analytical tool is one way to detect mispricing.

Resources used to verify the workings of the Excel model are listed at the end of this article.

Read More »

Contact CI       Computerized Investing

CI Market Dashboard

We have put together a collection of market indicators and track them to help you gauge the direction of the market.

CI Analysis Worksheets

Interactive analysis templates covering DuPont analysis (return on equity), valuing stocks the Warren Buffett way, and more to come.

Recent Articles

March 19, 2016

How to Track Mutual Funds in Google Sheets

This demo of Google Sheets uses the Google Finance function to automatically pull data into a simple fund watchlist.

August 15, 2015

Alternatives to Excel

An in-depth comparison of the major desktop and online spreadsheet options.

April 18, 2015

CI Mortgage Refinance Calculator

A worksheet that helps you see how refinancing your mortgage could affect your cash flow.

January 17, 2015

Retirement Withdrawal Calculator

A simple spreadsheet that allows you to input a few estimates and see whether you will have enough savings to last through your retirement years.

Click here for entire collection of Spreadsheet Corner articles ➜