reverse_dcf
Solve for the annual growth rate a stock's current price implies using a two-stage DCF. Compare that implied rate to historical revenue/FCF growth to judge if market expectations align with past performance.
Instructions
Instead of asking "what is the fair value", ask "what growth does the current price already assume": solves a two-stage DCF (5Y explicit growth + Gordon-growth terminal value) by bisection for the constant annual growth rate that makes the model's enterprise value match today's actual market cap + net debt. Compares that implied rate to the company's own historical revenue/FCF CAGR so you can judge whether the price requires stronger growth than the company has actually achieved. Not a forecast -- an implied-expectations check, with disclosed assumptions (wacc/terminal_growth are inputs you can override, not derived).
:param symbol: ticker symbol, e.g. "RELIANCE", "TCS.NS", or "TCS.BO"
:param wacc: discount rate assumption (default 0.12 = 12%)
:param terminal_growth: perpetuity growth assumption (default 0.04 = 4%); must be < wacc
Input Schema
| Name | Required | Description | Default |
|---|---|---|---|
| wacc | No | ||
| symbol | Yes | ||
| terminal_growth | No |
Output Schema
| Name | Required | Description | Default |
|---|---|---|---|
| error | No | Set if FCF is negative/zero or no solution exists in the search range | |
| symbol | Yes | ||
| wacc_pct | Yes | Discount rate assumption used (input, not derived) | |
| market_cap | No | ||
| current_price | No | ||
| projection_years | No | ||
| implied_growth_pct | No | Constant annual growth rate over the projection period implied by the current price | |
| terminal_growth_pct | Yes | Perpetuity growth assumption used (input, not derived) | |
| historical_fcf_cagr_pct | No | ||
| currency_mismatch_warning | No | Set when Yahoo's market-data and financial-statement currencies disagree for this ticker -- the entire DCF (which combines market cap with statement-sourced FCF) becomes unreliable when set. | |
| historical_revenue_cagr_pct | No |