IFB361: How to Project Revenue Growth in DCF

The Investing for Beginners Podcast - Your Path to Financial Freedom

Andrew Sather & Glassbox Media

Business, Investing

4.2 • 1.5K Ratings

🗓️ 7 October 2024

⏱️ 35 minutes

🔗️ Recording | iTunes | RSS

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Summary

Learn how to accurately estimate revenue growth in discounted cash flow (DCF) models, a crucial yet challenging aspect of company valuation. Discover techniques to minimize bias and improve accuracy, ensuring your investment decisions are based on solid financial analysis. 00:00:46 - Introduction to DCF Discussing revenue growth estimation in DCF models. 00:01:07 - Importance of Revenue Growth Revenue growth is crucial for long-term company valuation. 00:01:27 - Challenges in Estimation Estimating growth involves bias and guesswork challenges. 00:02:15 - Historical Revenue as a Guide Use past revenue trends to inform future estimates. 00:02:58 - Base Rates and Expectations Base rates help set realistic growth expectations. 00:03:41 - Avoiding Overconfidence Bias Don't overestimate growth beyond historical performance. 00:04:29 - Analyst Estimates as a Check Compare your estimates with market analyst expectations. 00:05:14 - Using Reinvestment Rate and ROIC Calculate growth using reinvestment rate and ROIC. Today's show is sponsored by: Go to shipstation.com and use code INVESTING to sign up for your FREE 60-day trial. Go to monarchmoney.com/BEGINNERS for an extended 30 day free trial! Sign up for a one-dollar-per-month trial period at shopify.com/beginners. Nerdwallet.com/learnmore Get two hundred fifty dollars when you join Ramp. Go to ramp.com/BEGINNERS Find great investments at Value Spotlight Have questions? Send them to [email protected] Start learning how to value companies here: DCF Demystified Link SUBSCRIBE TO THE SHOW Apple | Spotify | Google | Amazon | Tunein Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	I feel like I'm missing out because it seems like everyone is either starting a side hustle or becoming their own boss and you know what they're hearing a lot.
0:09.2	That's the sound of another sale on Shopify, the all-in-one commerce platform to start, run or grow your business.
0:18.0	Shopify is the Commerce platform revolutionizing millions of businesses worldwide.
0:23.0	Whether you're selling books or bracelets or donuts or dresses,
0:27.0	Shopify Simplifies selling online and in person
0:30.0	so you can successfully grow your business.
0:33.0	Covering all your sales channels from a shop front ready POS system to its all in one e-commerce platform.
0:40.0	Shopify even gets you selling across social media marketplaces like Facebook, Instagram and Tik-Tock.
0:47.0	Full of the industry leading tools ready to ignite your growth.
0:50.0	Shopify gives you complete control over your business and your brand without learning new skills in design or coding.
0:58.0	We all have a moment where we revolutionise our business.
1:01.0	My name's Andrew Gold. I'm a British journalist and I only recently
1:04.5	turned my podcast heretics into a thriving business recently and Shopify
1:09.6	is exactly the kind of thing that takes you from idea and concept into the land of success and
1:15.7	entrepreneurship and a whole lot of kaching.
1:19.2	Remember that sound from the beginning?
1:20.8	That's the sign your business is healthy. It's time to get serious
1:24.1	about selling and get Shopify today. This is trial period at Shopify.co. UK slash glass box all lower case.
1:37.8	Go to Shopify.co. UK slash glassbox to take your business to the next level today. Shopify.
1:44.3	code at UK slash glassbox.
1:46.9	It's taken a few months but I think I've almost chosen our next car.
1:50.7	I've weighed up new versus second-hand, assessed the depreciation rates
	...

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