Growth-Adjusted DCF (Retired)¶

Retired Model

Growth DCF has been removed from the dashboard as of March 2026 (85% failure rate). This page is kept for reference. See active models.

DCF variant that separates growth CapEx from maintenance CapEx, solving traditional DCF's bias against reinvestment.

Overview¶

Traditional DCF penalizes companies that reinvest heavily for growth by subtracting all CapEx from cash flow. Growth DCF recognizes that growth investments create future value and should be treated differently.

Key Innovation¶

CapEx Separation:

Maintenance CapEx = Depreciation (sustains current operations)
Growth CapEx = Total CapEx - Maintenance CapEx (creates new capacity)

Adjusted FCF:

FCF_growth_adjusted = Operating Cash Flow - Maintenance CapEx
# Growth CapEx excluded, treated as investment not cost

When to Use¶

Ideal For¶

High-growth companies (>15% revenue growth)
Capital-intensive growth (manufacturing expansion, new facilities)
Tech companies investing in R&D and infrastructure
Retailers expanding store count

Advantages Over Standard DCF¶

Fair to growth: Doesn't penalize Amazon-style reinvestment
Better comps: Growing vs mature companies more comparable
Realistic: Separates value-creating vs value-maintaining spend

Limitations¶

Estimation required: Separating CapEx types is subjective
Lower coverage: ~18% vs 98% for standard DCF
Data intensive: Needs detailed CapEx breakdowns

Implementation¶

Uses depreciation as proxy for maintenance CapEx when detailed breakdown unavailable.