How to Calculate Intrinsic Value: Step-by-Step Guide for Investors
“Price is what you pay. Value is what you get.”
– Warren Buffett
For investors, calculating a company’s intrinsic value is like having a financial compass. It helps you determine whether a stock is undervalued (a bargain) or overvalued (a trap). While the concept is simple—what is the true worth of a business?—the execution requires discipline, data, and a systematic approach.
In this guide, we’ll break down the key methods to calculate intrinsic value, highlight common pitfalls, and show you how tools like the ViA Atlas Case Study Membership streamline the process for investors like you.
Why Intrinsic Value Matters
Intrinsic value represents the true economic worth of a company, based on its ability to generate cash flows, assets, and growth potential. Unlike market price—which fluctuates daily due to sentiment—intrinsic value focuses on fundamentals.
Key benefits of mastering intrinsic value:
- Avoid overpaying for hype-driven stocks.
- Identify undervalued opportunities with a margin of safety.
- Build a portfolio grounded in long-term business performance.
3 Core Methods to Calculate Intrinsic Value
1. Discounted Cash Flow (DCF) Analysis
The gold standard for intrinsic valuation, DCF estimates the present value of a company’s future cash flows.
Formula:

- Forecast Free Cash Flows (FCF): Project FCF for 5–10 years.
- Determine Discount Rate (WACC): Use the company’s weighted average cost of capital (typically 8–12%).
- Calculate Terminal Value: Estimate value beyond the forecast period (e.g., perpetual growth model).
- Sum and Discount: Add discounted FCF and terminal value.
Example:
If a company’s FCF is $100M annually, growing at 3% with a 10% discount rate, its intrinsic value would be ~$1.5B.
2. Dividend Discount Model (DDM)
Best for mature, dividend-paying companies.
Formula:

Steps:
1. Estimate Dividends: Use historical payouts and growth rates.
2. Apply Discount Rate: Reflect the risk of the investment (often 7–10%).
Example: A stock paying $4/year in dividends, growing at 2% annually, with a 9% discount rate, has an intrinsic value of ~$57/share.
3. Asset-Based Valuation
Calculates Net Asset Value (NAV) by subtracting liabilities from assets.
Formula:

Common Mistakes to Avoid
1. Overlooking the Margin of Safety
Buying a stock at its exact intrinsic value offers no buffer for errors. Legendary investor Benjamin Graham recommended purchasing stocks at ≤⅔ of intrinsic value to protect against unforeseen risks.
2. Overly Optimistic Growth Assumptions
Projecting 20% annual growth for a slow-moving industry (e.g., utilities) leads to inflated valuations. Base forecasts on historical averages and industry trends.
3. Ignoring Debt and Liabilities
A company with high debt may seem cheap on P/E but risky on intrinsic value. Always factor in balance sheet health.
Simplify Your Analysis with the ViA Atlas Case Study Membership
Calculating intrinsic value manually is time-consuming. The ViA Atlas Case Study Membership automates the heavy lifting:
- Pre-Vetted Companies: Access a curated list of undervalued stocks with detailed DCF models.
- Expert-Built Templates: Plug in numbers to auto-calculate intrinsic value.
- Margin of Safety Filters: Screen for stocks trading at 30%+ below fair value.
Real-World Example: Zhen Hong, A ViA Atlas member went from 4% per annum ROI to 20% per annum ROI just by following the Case Studies in our IV Directory.
Join Our Free Webinar: Step-By-Step Company Analysis of a Good Growth US-Listed Company
Want to see how it works? Join Cayden Chang, founder of Value Investing Academy, for a live webinar:
What You’ll Learn:
- A deep dive into a fast-growth company case study.
- What are the key financial metrics when evaluating whether a stock has strong growth potential.
- Step-by-step guide on how to apply value investing methodology on real-world companies.
- Learn the exact criteria that successful investors use to evaluate a company
- How to determine the intrinsic value of a stock so you'll know exactly when to enter or exit the market.
- How ViA Atlas Intrinsic Value (IV) Directory can get you started on building your own portfolio of superhero stocks, even for busy professionals without much time to spare
👉 Reserve Your Spot Now
Key Takeaways
- DCF is King: Focus on cash flows, not headlines
- Margin of Safety is Non-Negotiable: Always buy below intrinsic value
- Tools Save Time: Use the ViA Atlas to skip hours of manual work
By mastering intrinsic value, you will invest with confidence - not guesswork.
P.S. The market won’t wait. Claim your free webinar seat today.
See Value Investing in Action
Presented by Cayden Chang
Founder of Value Investing Academy and Award-Winning International Speaker, Lifelong Learner Award 2008, Personal Brand Award 2017
You will learn:
- A deep dive into a fast-growth company case study.
- The key financial metrics used when evaluating whether a stock has strong growth potential
- Step-by-step guide on how to apply the Value Investing Methodology on real-life companies
- The exact criteria that successful investors use when evaluating any company
- How to determine the intrinsic value of a stock so you will know exactly when to enter or exit the market
- How ViA Atlas Intrinsic Value (IV) Directory can get you started on building your own portfolio of superhero stocks, even for busy professionals without much time to spare.
Click the button below to reserve your spot now.

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Robert G Allen

Through the past 40 years, MILLIONS of people have attended his live seminars and his graduates have earned BILLIONS in profits by following his financial advice. Today there are literally thousands of millionaires and multi-millionaires worldwide who attribute their success to Mr. Allen’s systems and strategies. Empowered by his philosophy of the Enlightened Entrepreneur, his students have generously contributed over 50 million dollars to their favorite churches, causes and charities.
As a public speaker, he has spoken to audiences worldwide as large as 20,000 people, sharing stages with the likes of Sir Richard Branson, Tony Robbins, Robert Kiyosaki, Oprah Winfrey, Prime Minister Tony Blair and Donald Trump. In America, the National Speaker Association gave him an award as America's Top Millionaire Maker.
As a trainer and educator, he has spoken to groups all over the world from United States, Singapore, Mexico, Canada, South Africa, Russia, Kazakhstan, Latvia, Slovenia, Australia, Italy, England, Japan, Taiwan, Hong Kong and China. He teaches on the subjects of personal finance, wealth creation, multiple streams of income, entrepreneurship, authorship, sales, marketing and personal growth.
He is a popular media guest appearing on hundreds of radio and television programs including Good Morning America, Regis Philbin, Neil Cavuto and Larry King. He has been the subject in numerous international publications including the Wall Street Journal, The Los Angeles Times, The Washington Post, Newsweek, Barons, Redbook, Money Magazine and The Reader Digest to name just a few.
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Ernee Ong is the co-founder of Proptiply, a property consulting and investment education company that builds on the concept of co-living to generate rental income. He aims to educate and empower aspiring property investors to attain their life goals through prudent and sound property investing principles.
Ernee is a loving husband to Jelene and a father to two wonderful daughters. Alongside Jelene, he is a co-founder and the driving force behind Proptiply™.
Proptiply™is a Property Education Company that empowers students with a focus on teaching them how to build cashflow by leveraging other people's resources and scaling up. Ernee has achieved remarkable success, moving from living in a 3-room HDB flat to owning a landed property and acquiring an additional one.
Ernee will be sharing insights into how individual Singaporeans or Permanent Residents (PRs) can scale up their property portfolio even with limited resources. His journey has been featured in prestigious media outlets like CNA, the South China Morning Post, and other news channels, showcasing how he managed to build an 8-figure business while overseeing 300+ properties in Singapore.
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Vincent is a financial planner who specializes in investment and retirement planning. He helps people achieve their financial goals and dreams through comprehensive and customized solutions.
He has nearly a decade of experience in the financial services industry and is a Certified Financial Planner, CFP®. He is passionate about educating people on the importance and relevance of financial planning in today's world.
He grew up in Toa Payoh, a mature estate in Singapore, witnessing many senior citizens struggle with health and financial issues. They often told him that "it's better to be dead than to be sick in Singapore". This made him realize the value of money and motivated him to learn about investments at a young age. Later, he discovered the financial planning industry and decided to pursue it as a career.
He loves what he does because he makes a positive difference in people's lives. Whether it's helping them grow their wealth, protect their income, or plan for retirement, he enjoys seeing them achieve their desired outcomes and live their best lives.
Self-made Millionaire Investor
Liu Feng

Liu Feng graduated from Beijing University and came to Singapore in 1994, and went from having a mere S$100 in his wallet to becoming a millionaire. Armed with a strong determination, he made the majority of his fortune through Value Investing using principles created by Warren Buffett, one of the richest man in the world. Across the years, he has accumulated extensive experience and in-depth knowledge in stock investing.
Liu Feng specialized in stock investment. Since he first read a book about Warren Buffet in 1996, he has since done extensive studies on Value Investing Gurus – Benjamin Graham, Philip Fisher, Peter Lynch and John Neff. Through continuously fine-tuning his investment model, combined with his investment experience, he has founded a set of Investment Philosophies, Value Investing Principles and Methodologies to create passive income. Those who have been taught by him have found his teaching easy to understand as well as benefited from his many years of experience and insight on stock investments.
As an experienced value investor, Liu Feng incorporates real case studies of numerous Singapore-listed companies in his training, coupled with a systematic and proven methodology to provide a distinct advantage in the stock market.
Lauren C Templeton

Lauren C. Templeton is the founder and Chief Executive Officer of Templeton & Phillips Capital Management, LLC. Prior to founding the firm in 2001, Lauren was employed with Morgan Stanley, Homrich Berg, and New Providence Advisors, a hedge fund management company, based in Atlanta, GA.
“Author of “Investing the Templeton Way: the Market Beating Strategies of Value Investing's Legendary Bargain Hunter”, Lauren is also the great niece of Sir John M. Templeton and is a current member of the John M. Templeton Foundation, established in 1987 by renowned international investor, Sir John Templeton. She began investing as a child under the heavy influence of her father as well as her late great-uncle, Sir John Templeton.
About Sir John Templeton
Sir John Marks Templeton was born in 1912, in the small town of Winchester, Tennessee. He attended Yale University and graduated near the top of his class and as President of Phi Beta Kappa. He was named a Rhodes Scholar to Balliol College at Oxford, from which he graduated with a degree in law.
Templeton started his Wall Street career in 1938 and went on to create some of the world’s largest and most successful international investment funds. He was famous for picking companies that hit “points of maximum pessimism” (ie. Rock bottom prices). When war began in Europe in 1939, he borrowed money to buy 100 shares each in 104 companies selling at one dollar per share or less, including 34 companies that were in bankruptcy. Only four turned out to be worthless, and he turned large profits on the others.
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Dr Todd A Finkle

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Dr. Finkle is an expert on Warren Buffett and Entrepreneurship. His recent book titled," Warren Buffett: Investor and Entrepreneur," is published by Columbia University Press. The book traces the entrepreneurial paths that shaped Buffett’s career, from selling gum door-to-door during childhood to forming Berkshire Hathaway and developing it into a global conglomerate through the imaginative deployment of financial instruments and creative deal making.
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Cayden Chang

Cayden Chang is the Founder of Mind Kinesis Investments Pte Ltd and Value Investing Academy Pte Ltd, which runs the first and only Value Investing training that is recommended and endorsed by Mary Buffett, the internationally acclaimed author and speaker of how billionaire Warren Buffett invests. His company also runs Value Investing workshops across Asia. With over 50,000 graduates across 11 cities in Asia, his methodology is tested, proven and easily duplicable even for someone who has no prior experience in investing.
Cayden holds two Bachelors’ Degrees and a Masters Degree from National University of Singapore. He has also been trained in value investing by Professor Bruce Greenwald in Columbia University, the institution where Billionaire investor Warren Buffett met Professor Benjamin Graham, as well as by Professor George Athanassakos, the finance professor who holds the Ben Graham Chair in Value Investing at the Richard lvey School of Business, University of Western Ontario.
Cayden has also received the Lifelong Learners Award 2008 from the Minister of Manpower on 18 November 2008, Mr Gan Kim Yong and he was featured in “TODAY” newspaper, “938Live Online News”, “938Live Radio Station”, “Mediacorp Xin.Sg” and “The Straits Times”. He was subsequently featured in “938Live Breakfast Club” Radio, “Channel News Asia AM Live”, “Shareinvestment”, “The Edge”, and “The Exquisite” Magazine for sharing his secrets of financial success.
In July 2010, he was diagnosed with Renal Cancer. Despite being ill, he launched his first charity project in August 2010, where he donated all of the sales proceeds of his book to The Straits Times School Pocket Money Fund, and was featured on 938 Live Radio Station and The Straits Times. His fight with Renal Cancer was subsequently published in The Straits Times and interviewed on 938Live Radio Station. His life story was featured in The Sunday Times on 10 June 2012. He survived terminal stage Renal Cancer (Stage 4) in September 2014 and launched his second book titled “The Book of Hope” to raise funds for cancer research.
