As mentioned on Investopedia.com, “There is no universal standard for calculating the intrinsic value of a company.”
In the following section we break down how we compare the Benjamin Graham Sticker Price to the TYKR Sticker Price and explain why we use the TYKR Sticker Price.
Benjamin Graham Sticker Price = (EPS(8.5+(1g))*4.4)/Y
TYKR Sticker Price = (Share Price*(1+Annualized EPS Growth Rate)^10)/4
With the TYKR Sticker Price we add an extra layer of rigor:
If the Annualized EPS Growth Rate is equal or greater than 30%, the highest growth rate is set to 30%.
If the Annualized EPS Growth Rate is equal or less than 15%, the lowest growth rate is set to 15%.
By adding this extra layer of rigor, we ensure the Sticker Prices are not too high or too low.
You may simply copy those equations to excel if you wish to run tests on your own. Don’t worry, we break down each in great detail.