Company Valuation Comparison Calculator
Compare the free cash flow valuation of two companies, evaluate FCF growth, and estimate their implied future market capitalization and potential upside.
Valuation Assumptions
Set the investment horizon and the FCF valuation multiple you believe is reasonable for the future.
Company Information
Use the same currency and units for both companies.
Company A
Company B
Valuation Comparison
Results are calculated based on the assumptions and company data entered above.
| Metric | Adobe | Salesforce | Comparison |
|---|---|---|---|
| Current Market Cap | – | – | – |
| Adjusted Free Cash Flow | – | – | – |
| FCF Yield | – | – | – |
| FCF Growth Rate | – | – | – |
| Current Market Cap / FCF | – | – | – |
| Expected FCF in 5 Years | – | – | – |
| Target FCF Valuation Multiple | – | – | Same Assumption |
| Implied Market Cap in 5 Years | – | – | – |
| Market Cap Upside | – | – | – |
| Current Market Cap / FCF in 5 Years | – | – | – |
Complete the calculation to see the valuation comparison between the two companies.
FCF Growth and Valuation Changes
Assuming the current market capitalization remains unchanged, see how FCF growth affects the current market cap / FCF multiple over time.
| Year | Adobe | Salesforce |
|---|
FCF Yield = Adjusted Free Cash Flow ÷ Current Market Capitalization.
Current Market Cap / FCF = Current Market Capitalization ÷ Adjusted Free Cash Flow.
Future FCF = Current FCF × (1 + FCF Growth Rate)Years.
Implied Market Cap = Future FCF × Target FCF Valuation Multiple.
Market Cap Upside = (Implied Future Market Cap ÷ Current Market Capitalization) − 1.
Current Market Cap / Future FCF = Current Market Capitalization ÷ Future FCF.
Important: The “Current Market Cap / FCF in X Years” multiple changes based on the FCF growth rate and investment horizon. It shows the valuation multiple that the current market capitalization would represent relative to future FCF, assuming the current market capitalization remains unchanged. It is not a direct forecast of the future stock price.
This tool is for investment research purposes only and does not constitute investment advice.
Frequently Asked Questions
1. What problem does this calculator solve?
The calculator is mainly designed to help answer the question: Which stock should I buy?
If I have two stocks that I like and want to compare their potential upside, I can use the calculator to estimate the potential return of each stock. I can then choose the stock with the greater potential upside.
2. What is Adjusted Free Cash Flow?
Please refer to: Stock Valuation Calculator
3. How accurate is this calculator?
The accuracy depends on the investor using it. Generally, the more experienced and knowledgeable the investor is, the more reliable the valuation results are likely to be.
4. What types of companies is the Stock Valuation Comparison Calculator suitable for?
The calculator is best suited for mature companies that are able to generate stable free cash flow.