Payback Time Calculator
The Payback Time method helps you determine the price at which a stock is worth buying, based on how quickly the investment can be recovered through compounded free cash flow growth. This calculator is embedded directly on this page, allowing you to input the data and get results instantly.
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How to Use This Calculator
Find the Required Inputs:
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Current EPS (Earnings Per Share): Found in the income statement.
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Free Cash Flow per Share: Found in the cash flow statement or calculated by dividing total free cash flow by the number of outstanding shares.
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Growth Rate: You can estimate this using:
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Historical growth trends from the company’s financial reports.
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Tools like Finbox, which provides growth projections in seconds​
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Enter the Values into the Calculator Below:
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The calculator will calculate the Payback Time Price for you.
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Understand the Results:
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Payback Time Price (with 50% Discount): The result already includes a 50% discount, making it the safe price you should aim to pay for the stock. No further adjustments are needed.
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Why Use the Payback Time Method?
The Payback Time method ensures that your investment is recovered within a reasonable timeframe, ideally within 8 years or less. By factoring in a 50% discount, this method builds in a margin of safety, reducing your exposure to risk while identifying potential undervalued stocks.
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Start Your Analysis
Use the calculator below to determine the Payback Time price for your chosen stock. If you’re unsure about any inputs, refer to the guide above for assistance.