Frequently Asked Questions

Growth Rate Assumed by Market

The Growth Rate Assumed by Market (Reverse DCF) is the growth rate the market is assuming for the stock to be fairly valued at its Current Price. All that means is that Vuru determines what growth rate would be used in the Growth Price calculation to make the result equal to the Current Price. Thus, this growth rate is what the market is assuming for the stock to be fairly valued.

It's valuable to think about whether or not that growth rate makes sense in the context of all of the information known about a company, to help decide if the growth rate is too high (making the stock overvalued) or too low (making the stock undervalued).