PVGO (Present Value of Growth Opportunities)

Finance

Calculate PVGO. Formula: PVGO = Stock Price - (EPS / Required Return). Shows value from future growth vs current earnings. Higher = better growth prospects.

Formula

PVGO = Price - (EPS / Required Return)

$100 price, $5 EPS, 10% return

Inputs
  • Current Stock Price: 100
  • Earnings Per Share (EPS): 5
  • Required Return (%): 10

PVGO = $100 - $50 = $50

Frequently asked questions

Positive PVGO?
Growth adds value above baseline earnings