Reverse DCF

A normal DCF asks “what is this worth, given my growth guess?” A reverse DCF asks the sharper question: what growth does the current price already require? If the required growth is far above what the business has ever delivered, you are paying for a future that has to be exceptional. If it is below the historical record, expectations are low.

Market cap

$425.2B

FCF (FY2026)

$9.4B

Starting P/FCF

45.3×

Discount rate10.0%Terminal growth2.5%Growth years10y

Growth the price requires

18.9% per year for 10 years

If COST grows free cash flow slower than this, today's buyer underperforms the 10.0% discount rate. Compare it to the company's actual 5- and 10-year FCF growth on its company page.

Forward mode: your growth guess → value

Your FCF growth estimate8.0%

Value: $191.7B (≈ $433/share vs $959 today)

Model: 10-year two-stage DCF on free cash flow with a terminal value; equity value only (net debt ignored for simplicity). This is an expectations lens, not a price target.