Intrinsic value

Intrinsic value is the theoretical present value of all the cash a business will produce over its remaining life, discounted at a rate that reflects the riskiness of those cash flows. It is the conceptual foundation underneath every valuation framework and the answer that every method — DCF, residual income, exit multiples, even pure peer comparisons — is trying to approximate. In practice we cannot compute intrinsic value precisely because the inputs are forecasts, not measurements. The report's operational estimate is Fair value, the calculated midpoint of the accepted valuation lenses. Potential value is the separately labelled high endpoint. Intrinsic value differs from market price by definition: market price reflects the marginal buyer's view today, while intrinsic value reflects the underlying economics. The gap between the two — wider than the margin of safety, in the right direction — is where investment opportunity lives.