Intrinsic value
The discounted present value of all cash a business will produce over its remaining life. The theoretical anchor for fair value, computed in practice as a range across explicit assumptions.
Intrinsic value = Σ FCFt / (1+r)^t over the asset's remaining lifeIntrinsic 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 (cash flows, growth rates, discount rates, terminal assumptions) are forecasts, not measurements. What we can do is bracket it. Our composite fair-value range is our operational estimate of intrinsic value, with the spread between the low and high ends signaling how much disagreement the input assumptions are absorbing. 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.