H-Model Valuation Calculator

How to use the H-Model Valuation Calculator (a more comprehensive guide can be found here):

  1. Enter the "Dividend or FCF per Share (D0)" in the first input field. This represents the yearly dividend payment issued by the stock. In addition, you can use free cash flow instead of dividends for companies that pay little to no dividends.

  2. Enter the "Initial high growth rate (% per year)" in the second input field. This represents the expected rate of growth for the stock's dividends during the initial high growth period.

  3. Enter the "Terminal growth rate (% per year)" in the third input field, which is how much the dividend is expected to grow after the company reaches maturity. This is usually set to less than 4% (generally 2-3%) to take into account long-term GDP and inflation growth.

  4. Enter the "Discount rate (% per year)" in the fourth input field. This represents the rate used to account for the time value of money and inflation. Click here to learn more about discount rates.

  5. Enter the "Length of high growth period (years)" in the fifth input field. This is the number of years you expect the growth rate to decline from the initial high growth rate to the terminal growth rate.

  6. Press the "Calculate" button. The stock price will be displayed in the result field below the input fields.

Note: All input values must be positive numbers.

Result will be displayed here.