Dilution-aware valuation accounts for the impact of stock-based compensation (SBC) on shareholder value. Traditional valuation models like the Gordon Growth Model ignore the fact that companies continuously issue new shares to employees, diluting existing shareholders. BurryDCF adjusts the valuation formula to reflect this ongoing dilution, giving you a more accurate picture of intrinsic value.

Owner's Earnings is a cash flow metric developed by Michael Burry that represents the true earnings available to shareholders. It's calculated as: Net Income + GAAP SBC (add back the non-cash expense) - Actual Stock Buybacks (real cash spent) - RSU Tax Withholding Payments (hidden cash outflow). This formula reveals the actual cash cost of stock-based compensation, which is often much higher than the GAAP expense.

Most DCF calculators use GAAP earnings or free cash flow, which don't properly account for stock-based compensation costs. BurryDCF uses Owner's Earnings (which shows the true cash cost of SBC) and applies a dilution adjustment to the Gordon Growth Model formula. This typically results in lower fair values for companies with significant stock compensation programs.

BurryDCF pulls financial data directly from SEC EDGAR XBRL filings (10-K and 10-Q reports) for Owner's Earnings components like Net Income, Stock-Based Compensation, Buybacks, and RSU Tax Withholdings. We use Polygon.io for real-time stock prices, dividends, and company information. All data sources are transparent—you can see the exact SEC XBRL fields used in the Growth Rate info panel.

Stock-based compensation dilutes existing shareholders by increasing the total share count. Wall Street typically adds back SBC as a 'non-cash' expense, but this ignores the real cost: companies must either accept dilution or spend cash on buybacks to offset it. For example, NVIDIA's GAAP SBC expense was $20.6B from 2018-2025, but they actually spent $112.5B on buybacks and RSU taxes—5.5x higher than the accounting expense!

The haircut shows the percentage difference between the Traditional GGM fair value and Burry's dilution-aware fair value. A 20% haircut means the dilution-adjusted value is 20% lower than the traditional value. Larger haircuts indicate companies with more significant dilution from stock compensation. A haircut above 25% is a red flag that dilution is materially impacting shareholder value.

Earnings Quality is the ratio of Owner's Earnings to Wall Street's 'Adjusted Earnings' (Net Income + SBC). A ratio above 80% indicates reasonable SBC costs. Between 60-80% suggests significant dilution. Below 60% is a red flag—it means Wall Street's earnings are inflated by 40% or more compared to what shareholders actually receive.

No. BurryDCF is for educational and informational purposes only. The valuations are based on mathematical models and historical data, which may not accurately predict future performance. Stock valuation is inherently uncertain, and many factors beyond dilution affect a company's true worth. Always do your own research and consult with a qualified financial advisor before making investment decisions.

All valuation models have limitations. The Gordon Growth Model assumes perpetual growth at a constant rate, which no company achieves in reality. Historical dilution rates may not predict future dilution. Growth rate estimates are inherently uncertain. BurryDCF provides one perspective on value—it should be used alongside other analysis methods, not as a sole decision-making tool.

The Gordon Growth Model requires the discount rate (d) to exceed the growth rate (g). The Burry model requires (1+d)(1+y) > (1+g). When these constraints are violated, the formulas produce negative or infinite values, which are meaningless. This typically happens with high-growth companies where the assumed perpetual growth rate is unrealistically high. In these cases, a multi-stage DCF model would be more appropriate.

BurryDCF uses the Capital Asset Pricing Model (CAPM): d = Risk-Free Rate + Beta × Market Risk Premium. The risk-free rate is the 10-year Treasury yield. Beta measures the stock's volatility relative to the market. The market risk premium is the expected return above the risk-free rate (typically 5-7%). You can also manually override the discount rate if you prefer a different assumption.

The dilution rate is the annual percentage change in shares outstanding. A positive rate means shares are increasing (dilution from stock grants). A negative rate means shares are decreasing (net buybacks). BurryDCF calculates this from historical SEC filings, using post-split data to avoid false readings from stock splits. The rate is capped between -20% and +50% to prevent extreme values.

Yes! BurryDCF offers both CSV and PDF exports. The CSV includes all input parameters, calculation breakdowns, and data provenance. The PDF is a multi-page report with an executive summary, CAPM calculation details, Owner's Earnings analysis with SEC XBRL field sources, and full valuation formulas. Both exports include timestamps and disclaimers for your records.

BurryDCF offers 4 free valuations with no signup required. After that, you can create a free account to continue. Premium subscribers ($4.99/month) get unlimited valuations. The free tier is great for occasional use, while premium is designed for active investors who analyze multiple stocks regularly.

BurryDCF works with any US-listed company that files with the SEC. This includes stocks on NYSE, NASDAQ, and other US exchanges. The tool requires SEC XBRL data for Owner's Earnings calculations, so very new IPOs or foreign companies without SEC filings may have limited data. Dividend-paying stocks work best with the traditional GGM model.