Share Price Calculator
Calculate your investment returns, profit/loss, and other key metrics
| Metric | Value |
|---|---|
| Total Shares | - |
| Purchase Price Per Share | - |
| Sale Price Per Share | - |
| Total Purchase Cost (without commission) | - |
| Total Sale Proceeds (without commission) | - |
| Buy Commission | - |
| Sell Commission | - |
| Profit/Loss Percentage | - |
Consider holding shares when:
• The company has strong fundamentals
• The industry outlook is positive
• You haven't reached your target price
• You're receiving good dividends
• Your investment thesis remains valid
• Taxes on gains would be significant
Consider selling shares when:
• The stock has reached your target price
• The company fundamentals deteriorate
• You need to rebalance your portfolio
• You've found a better investment opportunity
• You need the money for other purposes
• The stock has become overvalued
A Share Price Calculator is a financial tool that helps investors determine the value of a stock based on various metrics such as earnings, dividends, growth rates, and market conditions. It assists in making informed investment decisions by estimating fair value and potential returns.
How a Share Price Calculator Works
The calculator uses different valuation models to estimate a stock's intrinsic value, including:
Dividend Discount Model (DDM) – Estimates value based on expected future dividends.
Price-to-Earnings (P/E) Ratio – Compares stock price to earnings per share (EPS).
Discounted Cash Flow (DCF) – Values a stock based on projected future cash flows.
Comparable Company Analysis – Uses industry peers' valuation multiples.
Key Inputs Required
1. Dividend Discount Model (DDM) Inputs
Current Dividend per Share (D₀) – Latest annual dividend payment.
Dividend Growth Rate (g) – Expected annual growth of dividends.
Required Rate of Return (r) – Investor's expected return (discount rate).
2. Price-to-Earnings (P/E) Ratio Inputs
Earnings Per Share (EPS) – Company’s net income divided by outstanding shares.
Industry P/E Ratio – Average P/E of similar companies.
3. Discounted Cash Flow (DCF) Inputs
Free Cash Flow (FCF) – Cash generated after expenses and reinvestment.
Growth Rate – Expected FCF growth over time.
Discount Rate – Weighted Average Cost of Capital (WACC) or investor’s required return.
4. General Market Factors
Risk-Free Rate (e.g., 10-year Treasury bond yield).
Market Risk Premium – Excess return expected from stocks over risk-free rate.
Outputs Provided by the Calculator
Intrinsic Value per Share – Estimated fair value based on the chosen model.
Margin of Safety – Difference between intrinsic value and market price (for value investors).
Expected Return – Annualized return if the stock reaches its fair value.
Overvalued/Undervalued Signal – Whether the stock is a buy, hold, or sell.
Example Calculation (Dividend Discount Model - DDM)
| Input | Value |
|---|---|
| Current Dividend (D₀) | $2.00 |
| Dividend Growth Rate (g) | 5% |
| Required Rate of Return (r) | 10% |
| Calculated Intrinsic Value | $42.00 (Formula: ) |
If the current market price is $35, the stock is undervalued.
If the market price is $50, the stock is overvalued.
When Should You Use a Share Price Calculator?
Fundamental Investing – Estimating fair value before buying stocks.
Dividend Investing – Evaluating if dividend-paying stocks are worth holding.
Growth Stock Analysis – Assessing high-growth companies using DCF.
Portfolio Rebalancing – Deciding whether to hold or sell based on valuation.
Limitations of Share Price Calculators
Assumptions-Based – Growth rates and discount rates are estimates.
Market Sentiment Ignored – Doesn’t account for speculation or hype.
Changing Conditions – Economic shifts can alter valuations quickly.