Intrinsic (DCF) Value
The value of an asset based on discounted cash flow (DCF) analysis, which projects future cash flows and discounts them to present value.
Implications
The estimated value of an asset or company based on its expected future cash flows, discounted to their present value, often used in finance and investment to determine whether a stock is undervalued or overvalued.
Example
Example: An investor calculates the intrinsic value of a company using the discounted cash flow (DCF) method, concluding that the stock is undervalued based on the present value of its projected future cash flows, leading to a buy decision.
Related Terms
Different from market value, which reflects the current price at which an asset is traded, intrinsic value is a theoretical valuation based on fundamental analysis of future cash flows.
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