# PVGO Calculator – Present Value of Growth Opportunities

URL: https://speedycalculator.com/calculators/finance/pvgo/
Last updated: 2026-10-25

> The PVGO calculator splits a share price into the value of the company's current earnings as a no-growth perpetuity and the present value of its growth opportunities – how much of the price the market pays for future growth.

## Inputs

- Earnings (net income)
- Shares outstanding
- Share price
- Cost of equity (%)

## Results

- Earnings per share
- Value with no growth
- Present value of growth opportunities
- Share of price from growth

## Formula

```
No-growth value = EPS ÷ cost of equity
PVGO = share price − EPS ÷ cost of equity
```

## Explanation

If a company stopped growing and paid out all its earnings, its share would be worth EPS ÷ r. Anything investors pay above that is for growth. A high PVGO share is typical of growth stocks and makes the price sensitive to growth expectations.

### How to use the PVGO Calculator – Present Value of Growth Opportunities

- **Earnings (net income)**
- **Shares outstanding**
- **Share price**
- **Cost of equity**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the earnings and number of shares (or EPS), the share price and the cost of equity.

### Tips

- Use figures for the same period (a month, a quarter or a year) for every input so ratios compare like with like.
- Track the metric over time – the trend usually tells you more than a single value.
- Compare your result with industry benchmarks, which vary a lot between sectors.
- Treat the result as a starting point for a decision, then check the assumptions behind each input.

### Common mistakes to avoid

- Mixing monthly and yearly numbers in the same calculation.
- Using revenue where the formula needs profit (or the other way round).
- Forgetting hidden costs such as taxes, fees, overheads or your own time.

### Inputs explained

FieldWhat to enterEarnings (net income)Amount in your currencyShares outstandingA numberShare priceAmount in your currencyCost of equityIn %

### What each result means

- **Earnings per share** = [Earnings (net income)]÷[Shares outstanding]
- **Value with no growth** = [Earnings per share]÷([Cost of equity]÷100)
- **Present value of growth opportunities** = [Share price] - [Value with no growth]
- **Share of price from growth** = [Present value of growth opportunities]÷[Share price]×100

### Example values

How the main result changes when **Earnings** changes and everything else stays at the example values above:

Earnings (net income)Present value of growth opportunities25,000,00062.2237,500,00048.3350,000,00034.4462,500,00020.5675,000,0006.67100,000,000-21.11

## Worked example

Inputs — Earnings (net income): $50,000,000; Shares outstanding: 10,000,000; Share price: $90; Cost of equity: 9 %.

Results — Earnings per share = $5.00; Value with no growth = $55.56; **Present value of growth opportunities = $34.44**; Share of price from growth = 38.27 %.

## FAQ

**What does a negative PVGO mean?**
The market values the company below its no-growth value – it expects earnings to fall or returns below the cost of capital.

**Which companies have a high PVGO?**
Fast-growing technology and biotech firms.

**How do I find the cost of equity?**
Use the CAPM or dividend discount model calculators.

**What formula does the PVGO Calculator – Present Value of Growth Opportunities use?**
No-growth value = EPS ÷ cost of equity.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)