Margin of Safety Calculator
Enter your estimated intrinsic value and the current price. This tells you the cushion — or lack of one — between what you think a stock is worth and what it costs today.
How to read this number
If your value estimate is right, this is the cushion. A positive margin of safety means the stock trades below what you believe it is worth — the bigger the gap, the more room for error in your estimate. A negative margin means the price is above your value estimate, so you are paying for assumptions that still have to come true. This calculator does not tell you to buy or sell; it only measures the distance between your number and the market's number.
Formula & assumptions
Common questions
What is margin of safety in investing?
Margin of safety is the gap between your estimate of a stock's intrinsic value and its current price. It is the cushion that protects you if your estimate turns out to be too optimistic.
How is margin of safety calculated?
Margin of safety in dollars equals intrinsic value minus current price. As a percentage, it equals (intrinsic value minus price) divided by intrinsic value.
What margin of safety is considered good?
There is no universal number. Many value-oriented investors look for a meaningful cushion, but the right margin depends on how confident you are in your value estimate and the stock's risk.
Go deeper
Want an intrinsic value estimate instead of guessing one? Run the Fair Value Stress Test on any ticker.
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