Fair Value Calculator

How the fair value stock calculator works

Determining the real value of a stock is one of the most important steps for any investor, especially those who follow a fundamentals-based approach. One of the most respected models for this is the Benjamin Graham formula, which helps identify whether a stock is undervalued or overpriced using financial indicators.

To make this process easier, we developed a simple and intuitive calculator that applies Graham’s formula automatically. Just fill in the key financial metrics—P/E ratio, P/B ratio, EPS, and book value per share—and the system instantly provides the estimated fair value of the stock.

What is a stock’s fair value?

The fair value represents the intrinsic value of a stock, based on the company’s financial fundamentals rather than market fluctuations. This concept is widely used in value investing strategies, where the focus is on buying good companies at a discount.

To calculate this, we consider metrics like earnings per share (EPS), book value, and valuation multiples such as price-to-earnings and price-to-book ratios. This provides a clearer picture of how much a share should ideally be worth.

How the calculator works

Our calculator uses a formula derived from Benjamin Graham’s valuation model. To estimate the fair value of a stock, you’ll need to input:

• P/E Ratio (Price-to-Earnings): the current stock price divided by earnings per share

• P/B Ratio (Price-to-Book): compares the market price with the company’s book value

• EPS (Earnings Per Share): net profit divided by the total number of outstanding shares

• Book Value Per Share: total equity divided by the number of shares

With these four inputs, the calculator outputs the estimated fair stock price. For example, if you enter:

• P/E: 12

• P/B: 0.12

• EPS: $0.12

• Book Value: $0.12

The system will calculate a fair value of $0.73 for the stock.

Why this estimate is useful

This calculation is especially useful for long-term investors who rely on data and financial health rather than market speculation. It provides a practical way to determine if a stock is currently underpriced or overvalued compared to its real value.

The tool can be used to quickly analyze any stock using publicly available information from earnings reports or financial portals. It’s ideal for beginner and advanced investors alike.

Benefits of using the calculator

• Saves time and eliminates manual calculations

• Based on a respected, fundamental valuation model

• Can be used with any publicly traded stock

• Helps compare multiple stocks objectively

This tool also supports portfolio strategies focused on long-term growth and value, allowing investors to spot opportunities with a margin of safety.

How to interpret the result

The fair value result is an estimate based on static inputs. If the stock’s current market price is below the calculated fair value, it may be undervalued. If the price is above, it could mean the stock is trading with high expectations or market speculation.

While the calculator is helpful, it should not be the only step in the analysis. Always consider the company’s overall health, industry conditions, and macroeconomic context when evaluating an investment opportunity.

Conclusion

The fair value stock calculator is a practical and free tool for anyone who wants to make more informed investment decisions. Based on a classic valuation method, it gives a quick and clear estimate of how much a stock should ideally be worth.

By using reliable inputs and analyzing them with this model, you gain a better perspective on each investment. Whether you're building a long-term portfolio or just screening for undervalued stocks, this calculator can help you identify hidden value in the market.