virattt/dexter
Overview
This skill performs a full discounted cash flow (DCF) valuation to estimate intrinsic value per share and compare it to the current market price. It automates data gathering, projects free cash flows, estimates a sector-aware discount rate (WACC), runs sensitivity tests, and returns a validated fair value with clear caveats. The output is a structured valuation summary ready for decision-making or reporting.
How this skill works
The skill fetches historical cash flow, balance sheet items, market and analyst data, and company facts to compute a 5-year forecast of free cash flows plus a Gordon-growth terminal value. It derives a growth rate from FCF history and analyst signals, estimates WACC using sector defaults and capital structure, discounts projected cash flows to enterprise value, subtracts net debt, and divides by outstanding shares to produce fair value per share. A 3×3 sensitivity matrix (WACC ±1% vs terminal growth 2.0/2.5/3.0%) is produced and the model runs sanity checks against reported enterprise value, terminal weight, and FCF-per-share heuristics.
When to use it
- You want an intrinsic per-share estimate or price target based on fundamentals.
- Assess if a stock is undervalued or overvalued relative to fundamental value.
- Cross-check analyst price targets or provide a second-opinion valuation for investment memos.
- Evaluate long-term investment decisions where cash-flow fundamentals matter.
- Generate sensitivity analysis for risk-adjusted scenarios in pitchbooks.
Best practices
- Provide 5 years of reliable cash flow and balance sheet data to minimize forecast noise.
- Cross-validate FCF CAGR with analyst EPS and revenue growth before locking assumptions.
- Cap long-term growth conservatively (default terminal growth 2.5%) and limit FCF growth to a maximum of 15%.
- Use sector-adjusted WACC ranges and sanity-check that WACC sits below ROIC for value-creating firms.
- Run the 3×3 sensitivity matrix and revisit assumptions if EV differs >30% from reported enterprise value.
Example use cases
- Produce a fair-value per-share estimate for a buy/hold/sell recommendation.
- Create a valuation appendix for an equity research report including inputs, projections, and sensitivity grid.
- Compare intrinsic value vs market price to identify potential arbitrage or mispricing.
- Validate management guidance by testing scenarios where near-term growth or margin changes.
- Build an investment committee brief that highlights key valuation drivers and model caveats.
FAQ
Five years of cash flow statements, latest balance sheet (debt, cash, shares), current price, market/enterprise value, and analyst estimates. Missing FCF can be computed as operating cash flow minus capex.
How does the model pick growth and discount rates?
Growth uses a 5-year FCF CAGR cross-checked with revenue and analyst EPS growth and is haircut to reflect stability (capped at 15%). WACC is chosen from sector defaults and adjusted using debt-to-equity and standard risk premia.
What validation checks are performed?
The model ensures calculated EV is within 30% of reported enterprise value, terminal value comprises a reasonable share of total EV (typically 50–80% for mature firms), and per-share results align with FCF-per-share heuristics.
