ATLAS
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Methodology

Intrinsic Value (DCF). How ATLAS calculates it.

This page explains, in simple terms, what Intrinsic Value is, how ATLAS calculates it, what data we use, and why this approach makes sense.

See valuation in ATLASSee the track record
DCF

The formula

10y + terminal

# 1
PV = Σ  FCFt / (1 + WACC)t     t = 1…10

# 2
TV = FCF11 / (WACC − g)

# =
IV = PV + TV / (1 + WACC)10

1. What is Intrinsic Value?

Intrinsic Value is an estimate of what a company is worth based on the cash it can generate in the future. Instead of market sentiment or short-term price movements, we ask:

?
“How much cash can this business generate over time, and what is that worth today?”

2. The model we use (DCF)

ATLAS uses a Discounted Cash Flow (DCF) model with two parts:

01

10-year forecast

Future Free Cash Flows are projected using the company’s own historical data.

02

Terminal value

Estimates the value of all cash flows beyond year 10 assuming stable long-term growth.

3. What data we actually use

  1. 01

    Free Cash Flow (FCF)

    Calculated from operating cash flow minus capital expenditures from the company's reported financial statements. Values are normalized to total company cash flows.

  2. 02

    Growth rate

    Derived from historical FCF using multi-year CAGR and year-over-year changes, with safeguards to avoid unrealistic projections.

  3. 03

    Discount rate (WACC)

    Based on the US 10Y Treasury yield, company beta, and an equity risk premium.

  4. 04

    Terminal growth

    Fully dynamic and market-based, derived from long-term inflation expectations published by the US Federal Reserve (FRED). No hardcoded assumptions.

4. How to interpret the result

Intrinsic Value is not a price target. If intrinsic value is above market price, the market may be assuming lower growth or higher risk. If it is below, optimistic expectations may already be priced in.

This analysis is for informational purposes only and is not investment advice.