Intrinsic Value vs Fair Value: What's the Difference?
요약
Intrinsic value is what a business is worth based on the cash it can generate over time, estimated with a DCF model that is largely independent of the current market price. Fair value is usually a relative estimate derived from earnings or other multiples, anchored to what comparable companies trade at. Intrinsic value asks what the business is truly worth; fair value asks what a reasonable price looks like given the market.
| 항목 | Intrinsic Value (DCF-based) | Fair Value (multiple-based) |
|---|---|---|
| Definition | What the business is worth based on its own future cash flows | A reasonable price implied by earnings or peer multiples |
| Calculation Basis | Discounted future free cash flows (DCF) | Earnings multiple such as PE applied to EPS |
| Reliance on Market Sentiment | Low — driven by fundamental assumptions | Higher — anchored to current market multiples |
| Best-Suited Companies | Businesses with predictable free cash flow | Profitable companies with comparable peers |
| MiniValuator Page | DCF valuation (/dcf) | PE valuation (/pe) |
| Main Limitation | Very sensitive to growth and discount rate assumptions | Inherits market mispricing when the peer group is expensive |
다음과 같은 경우 Intrinsic Value (DCF-based) 선택...
Investors who want an independent estimate of what a company is worth based on its future cash flows, especially for long-term decisions where the current market price may be wrong.
다음과 같은 경우 Fair Value (multiple-based) 선택...
Investors who want a quick read on whether a profitable company is reasonably priced relative to its earnings and peers, useful for screening and sanity checks.
Estimate both with MiniValuator — get a DCF intrinsic value and a PE fair value for any US stock, free to start.
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