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Home Questions How do we treat big discrepancies bewteen DCF and EPV valuations?

How do we treat big discrepancies bewteen DCF and EPV valuations?
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3:32 am
April 14, 2010


Jae Jun

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posts 1336
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These valuation methods all have different uses which is why I included 3 very different methods in the spreadsheet.

DCF is for cash flow positive companies with at least 5 years of operational history.

EPV is suited for companies that may have erratic cash flows as it focuses more on the income statement.

Two very different methods and so it is very possible to yield two very different results.

12:39 am
April 12, 2010


zehua

Member

posts 96
1

For example, FDP has DCF to be $34 with 0% growth, but EPV is only $8. I am not sure which number to take.

Another example is NOVA. The EPV is $6, but DCF is a negative number.
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