Reverse DCF Skill

Purpose

Infer what growth, margin, and cash flow assumptions are implied by the current market price.

Trigger Examples

• "Run a reverse DCF for NVDA."
• "What growth does the current stock price imply?"
• "Are market expectations reasonable at this price?"
• "What FCF margin is embedded in the market cap?"

Hard Rule

If this skill is selected by the valuation router, it must either:

1. Execute Reverse DCF, or
2. Explicitly block execution and list missing/stale inputs.

Never only state that Reverse DCF should be run.

Required Inputs

Minimum FCF-growth mode:

• Market cap or share price plus shares outstanding
• Net debt or cash / debt bridge
• Base FCF or normalized FCF
• Forecast period
• Discount rate
• Terminal growth
• Source dates for market and financial inputs

Revenue-to-FCF mode may replace base FCF with revenue and target FCF margin.

Inputs

• Current share price
• Shares outstanding
• Market cap
• Cash and marketable securities
• Total debt
• Net debt
• Base FCF or base revenue
• Current / normalized FCF margin
• Forecast period
• Discount rate
• Terminal growth rate
• Data source dates

Modes

FCF Growth Reverse DCF

Use when base FCF is reliable.

Revenue-to-FCF Reverse DCF

Use when FCF is temporarily depressed due to reinvestment.

Scenario Reverse DCF

Use when the company has high uncertainty or multiple possible futures.

Script Mapping

• Reverse DCF implementation: scripts/valuation/valuation_reverse_dcf.py
• Unified executor: scripts/valuation/valuation_executor.py
• Execution gate policy: references/valuation_rules/reverse_dcf_execution_policy.md

Minimal Output Contract

Show only market-implied assumptions, reasonableness, source freshness, and blockers. Do not show formulas, spreadsheet rows, or solver traces unless explicitly requested.

Output

Reverse DCF Result:
- Market-implied EV:
- Base metric:
- Forecast period:
- Discount rate:
- Terminal growth:
- Implied growth:
- Implied FCF margin:
- Reasonableness:

Blocking Output

Reverse DCF Blocked:
- Missing data:
- Stale data:
- Required next data:
- Effect on investment conclusion: