Guide
Intrinsic value of a stock
Intrinsic value, which MEQIRI calls fair value, estimates what a stock is worth from the company's numbers. MEQIRI calculates it nightly for 5,031 stocks, half from future cash flows, half from the industry P/E.
Example Apple
- Price on 13 Nov 2026
- $356.27
- Fair value
- $218.61
- Distance to fair value
- +63%
The price is 63% above fair value. The calculation follows below, step by step.
Apple fair value in detailHow MEQIRI calculates fair value
Fair value = (cash flow value + industry value) / 2
- 1Cash flow valueFree cash flows for the next ten years, the first ones from analyst estimates, the rest projected. Each amount is discounted to today, plus a terminal value for the years after. The total is divided by the number of shares.
- 2Industry valueEarnings per share over the last twelve months times the median P/E of the industry. If the industry has too few stocks, the sector P/E applies.
- 3AverageFair value is the average of both parts. If one part is missing, for example because the company makes a loss, the other counts alone.
The discount rate is the cost of equity: the five-year average yield of the 10-year government bond plus the industry beta times the country risk premium, at least 5 percentage points above terminal growth. Terminal growth is that same bond yield.
For banks and insurers MEQIRI uses an excess return model based on book value and earnings, for utilities a dividend model, and for real estate funds FFO instead of earnings.
Apple example with real numbers
The numbers come from last night's run with the closing price of 13 Nov 2026. The page recalculates the cash flow value and fair value from them on every visit.
| Step | Value |
|---|---|
| Discounted free cash flows 2027 to 2036 | $1.17T |
| Discounted terminal value for the years after 2036 | $1.71T |
| Equity value | $2.88T |
| Cash flow value per share (divided by 14,630,318,000 shares) | $196.83 |
| Industry value: EPS $9.03 times P/E 26.6 | $240.40 |
| Fair value: average of both parts | $218.61 |
| Price on 13 Nov 2026 | $356.27 |
Discounted at a cost of equity of 9,8%, terminal growth is 3,8%. 5 years come from analyst estimates. The P/E of 26.6 is the median P/E of the sector. The price is 63% above fair value.
Apple fair value in detailLimits of the method
- Estimates can be wrong. Only the first years come from analysts, the model projects the rest.
- Small changes have a big effect. With a cost of equity one percentage point higher, Apple's fair value falls to $204.00, one point lower raises it to $239.20.
- The terminal value carries a lot. For Apple it makes up 59% of the cash flow value, the years after 2036.
- Cyclical companies earn more at the peak than on average. MEQIRI therefore uses their median margin over ten years.
- If the model lands below a quarter or above four times the price, MEQIRI shows no fair value. The figure would say more about the assumptions than about the company.
- Fair value is not a price target and not a recommendation. It does not say whether or when the price will reach it.
Largest gaps to fair value
A plain data list, not a recommendation: US and European stocks with a market cap of $10B or more, as of 14 Nov 2026. A large gap often means the model captures the company poorly.
Price furthest below fair value
| Stock | Price | Fair value | Gap |
|---|---|---|---|
| Charter Communications | $138.39 | $535.09 | −74% |
| Sandisk | $885.01 | $3,364.57 | −74% |
| Super Micro Computer | $26.87 | $94.49 | −72% |
| CSG | $11.16 | $37.86 | −71% |
| International Consolidated Airlines Group | $5.99 | $20.19 | −70% |
| Carrefour | $15.72 | $52.77 | −70% |
| Global Payments | $91.90 | $301.26 | −69% |
| $19.15 | $61.58 | −69% | |
| CoreWeave | $53.13 | $170.61 | −69% |
| Flutter Entertainment | $81.13 | $260.47 | −69% |
Price furthest above fair value
| Stock | Price | Fair value | Gap |
|---|---|---|---|
| JFrog | $113.60 | $28.63 | +297% |
| Cameco | $70.73 | $17.85 | +296% |
| Take-Two Interactive Software | $227.82 | $58.41 | +290% |
| TechnipFMC | $66.26 | $17.36 | +282% |
| Datadog | $184.16 | $50.87 | +262% |
| Takeda Pharmaceutical | $21.43 | $5.93 | +262% |
| MongoDB | $334.20 | $95.25 | +251% |
| STMicroelectronics | $46.73 | $13.42 | +248% |
| Baxter International | $25.81 | $7.51 | +243% |
| Natera | $319.09 | $95.64 | +234% |
Fair value of individual stocks
Every stock page shows fair value with the full calculation, year by year.
Frequently asked questions
What is the intrinsic value of a stock?
An estimate of what a stock is worth based on the company's numbers, independent of its market price. MEQIRI calls it fair value and calculates it half from future cash flows and half from earnings times the industry P/E.
What is the formula for intrinsic value?
Discount the expected free cash flows to today and divide by the number of shares, or take earnings per share times a typical P/E. MEQIRI takes the average of both. For Apple: ($196.83 + $240.40) / 2 = $218.61.
What does it mean if the price is below intrinsic value?
That the market values the stock lower than the model. This can come from assumptions in the model that are too high or from risks the model does not know about. It is not a price target or a recommendation.
Is intrinsic value a price target?
No. A price target says where an analyst expects the price in twelve months. Intrinsic value estimates what the stock is worth today from the company's numbers and says nothing about when the price might reach it.
How often does MEQIRI recalculate fair value?
Every night for all stocks, with the latest prices, financial statements and estimates. Interest rates and industry figures are updated at the same time.
Why do other sites show a different intrinsic value?
Every model uses its own assumptions: different rates, different estimates, a different weight for the terminal value. One percentage point in the cost of equity already changes the value markedly. That is why MEQIRI shows its assumptions on every stock page.