Sticker Price Calculator
Work out a stock's Sticker Price (fair value) and margin of safety buy price, Rule #1 style. Fill it from any stock we cover, or enter your own numbers.
Fill from a stock (optional)
Uses PaybackPrice's stored numbers for that stock. You can change any of them.
Earnings per share, last 12 months
Rule #1 default: 2 × growth
PaybackPrice uses 9%; classic Rule #1 uses 15%
PaybackPrice uses 60%; classic Rule #1 uses 50%
To see whether it's on sale
Result
Enter the EPS and growth rate, or fill from a stock.
Questions
What is the Sticker Price?
It's what a company is worth today if its earnings keep growing as you expect. Grow today's earnings per share for 10 years, multiply by the P/E the market is likely to pay then, and discount that future price back to today at your minimum yearly return.
What is the margin of safety buy price?
It's the price you'd actually pay: a discount to the Sticker Price that protects you if your estimates are too optimistic. PaybackPrice uses 60%, so the buy price is 40% of the Sticker Price.
Why 9% and 60% here, when Rule #1 uses 15% and 50%?
They're the numbers PaybackPrice uses for every stock: a 9% minimum return with a deeper 60% margin of safety. Classic Rule #1 asks 15% a year with a 50% margin. Both are just settings here: type 15 and 50 to use the classic ones.
What growth rate should I use?
Rule #1 suggests the lower of the company's historical growth (for example, equity per share) and analysts' estimates, and never more than 15% a year. When you fill from a stock, we use the growth rate our own model applied.
Why is PaybackPrice's own value different?
This calculator holds growth flat for 10 years using one formula. Our own valuation picks a method that suits the business (cash flow, dividends, book value and others), lets growth fade over time, and checks the result for plausibility.
PaybackPrice has already worked out a fair value and buy price for more than 2,400 US stocks, and can tell you when one reaches its buy price.
For education only, not investment advice. The result is only as good as the numbers you put in. More calculators