Three-stage DCF

A three-stage DCF is a discounted cash flow that splits the future into three stretches with different growth rates: a few years of explicit projection, a transition phase in which growth fades gradually, and a final phase of stable growth in perpetuity. It avoids the common error of projecting today's growth forever, which is what most inflates the valuation of fast-growing companies.

See the full glossary · What the Celsmar financial terminal is

Definition for informational purposes. It is not financial advice nor a recommendation to buy or sell.