Valuation Sensitivity: The Grid That Shows What Your Assumption Is Worth

Why Point Estimates Lie

A DCF or reverse-DCF that prints "fair value: $189" hides the most important information: how much does that number move if the assumptions are wrong by a small amount? In practice, swinging WACC by 100 bps and terminal growth by 50 bps routinely moves a DCF output by 40-70%. A valuation that depends on getting two inputs precisely right, when you can't, isn't a valuation — it's a guess wearing math. A sensitivity grid turns the guess into a visible range, and the range is always more honest than the point estimate.

What the Sensitivity Card Shows

The Sensitivity card renders a color-coded 2D grid of fair-value-per-share across the two assumptions most likely to swing the output: WACC on one axis (default range: ±200 bps from the computed WACC in 50 bps steps) and terminal growth rate on the other (default range: 0% to 4% in 50 bps steps). Each cell is colored by premium / discount vs the current stock price. A second tab swaps WACC for steady-state operating margin for businesses where the margin assumption is the load-bearing one (SaaS, cyclicals). Export-to-CSV lets you drop the grid into a spreadsheet.

Reading the Grid

Two reads are the most actionable. First, look at the corners, not the center — if the top-left (pessimistic WACC + pessimistic terminal) is still above the current price, the stock is cheap under almost any reasonable assumption; if the bottom-right (optimistic everything) is still below, the stock is expensive under almost any assumption. That's the rare high-conviction setup. Second, count how many cells sit on each side of the current price — if 70% of the grid shows premium, the baseline is "cheap"; if 70% shows discount, the baseline is "expensive"; if it's 50/50, the stock is fairly priced under diverse assumptions and you're not going to find easy alpha on valuation alone.

Where It Fits

Sensitivity is the honest anchor for every other valuation card. Pair with the base DCF, the Reverse DCF for the implied-growth frame, and EPV for the no-growth floor. Combined, you see the floor, the point estimate, the implied expectations, and the sensitivity — which is most of what useful equity valuation can tell you.

Open the Sensitivity card → /app/stocks/AAPL/fundamentals