Split a stock price into the value of current earnings and the present value of growth opportunities.
Please do not make financial decisions based on these results.
What is the PVGO Calculator?
Split a stock price into the value of current earnings and the present value of growth opportunities. To use the PVGO Calculator, enter share price, earnings per share, required return; it returns pvgo per share, value of earnings (no growth), share of price from growth, and shows them instantly as you type.
Where the PVGO Calculator fits
Split a stock price into the value of current earnings and the present value of growth opportunities. The main figure it returns is the PVGO per share, worked out from the values you enter.
It belongs with the other business planning tools. If you are comparing options or checking a result from another angle, try the Business Valuation Calculator, Profitability Index Calculator or the High-Low Method Calculator.
How to use the PVGO Calculator
- Fill in the fields. You will need Share price ($), Earnings per share ($), Required return (%). Use figures from the same period (same month, quarter or year) for every field. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the PVGO per share, and the cards below show Value of earnings (no growth), Share of price from growth. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the PVGO Calculator using the default values shown in the calculator above:
Inputs
| Share price ($) | 60 |
|---|---|
| Earnings per share ($) | 3 |
| Required return (%) | 9 |
Results
| PVGO per share | $26.67 |
|---|---|
| Value of earnings (no growth) | $33.33 |
| Share of price from growth | 44.44% |
With these inputs the calculator returns PVGO per share: $26.67. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Share price ($) from 60 to 72 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| PVGO per share | $26.67 | $38.67 | +45% |
| Value of earnings (no growth) | $33.33 | $33.33 | 0% |
| Share of price from growth | 44.44% | 53.7% | +20.8% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the PVGO Calculator reports PVGO per share, value of earnings (no growth) and share of price from growth. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. The result is only as accurate as the numbers you enter and the formula shown above. It is for information, not financial, tax or legal advice.
Frequently asked questions
What does a high PVGO mean?
Investors expect much of the share price to come from future growth rather than today’s earnings.
Are the results forecasts?
No. They apply the formula shown to the numbers you enter, so the output is only as realistic as your assumptions.
What is the most important number for a new business?
Cash runway. A profitable plan still fails if cash runs out first, so check burn rate and break-even together.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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