Value the Business, Not the Ticker
Explain why intrinsic value depends on future cash flows, their timing, and their risk.
Principle: Start with cash generation, not the latest price move. Cash Flows A DCF turns the business model into expected free cash flows. That means the revenue, margin, working-capital, tax, and reinvestment assumptions must all describe the same operating story. Discount Rate Risk enters through the return investors require. A higher-risk cash-flow stream deserves a higher discount rate, which lowers present value even if the accounting forecast looks attractive. Terminal Value The terminal value should reflect sustainable economics, not an optimistic escape hatch. Long-run growth must fit market size, competitive intensity, and the capital needed to keep growing.
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