The Margin of Safety calculator that actually pulls live data.
Estimate what a stock is actually worth from its earnings and growth, then see how big a discount you're getting at today's price. Enter a ticker and the inputs fill themselves.
AAPLMargin of Safety
61.5% above intrinsic value
Loaded AAPL. These are sample figures. The live add-in pulls current EPS, a growth estimate, and the real time price.
The margin of safety formula
Once you have an intrinsic value estimate, the margin of safety is the gap between that value and the price, shown as a percentage.
What margin of safety means
Margin of safety is the cushion between what you think a stock is worth and what you pay for it. The idea comes from Benjamin Graham and was carried forward by Warren Buffett: because every valuation rests on estimates that can be wrong, you use a buffer so that even a flawed estimate still leaves you protected.
Think of it as buying a dollar of value for seventy cents. If your analysis is off by a little, the buffer absorbs the error. If the market turns against you, you bought low enough that the downside is limited. The bigger the uncertainty in your estimate, the bigger the margin you should demand.
What counts as a good margin of safety?
There is no single right number. It scales with how confident you are in your estimate and how predictable the business is.
Thin (under 15%)
Little room for error. Only defensible for very stable, easy to forecast businesses you understand deeply.
Reasonable (20 to 30%)
The range most value investors target on quality companies they can model with confidence.
Deep value (40%+)
The cushion for volatile, misunderstood, or hard to forecast businesses, or for buying during market panics.
AAPL's Margin of Safety, line by line
Once you have the intrinsic value, the margin of safety tells you how much discount you're getting — and whether it's worth buying.
AAPL Inc.
Project future EPS
Current EPS: $6.42 Growth: 9.0% for 10 Years Future EPS = EPS × (1 + g)ⁿ Future EPS = $6.42 × (1 + 9.0%)10
Estimate future share price
Future EPS: $15.20 Exit PE: 24.0x Future Price = Future EPS × PE Future Price = $15.20 × 24
Discount to intrinsic value
Future Price: $364.76 Required Return: 10.0% Intrinsic Value = Future Price / (1 + r)ⁿ IV = $364.76 / (1 + 10.0%)10
Calculate margin of safety
Intrinsic Value: $140.63 Current Price: $227.14 MOS = (IV − Price) / IV MOS = ($140.63 − $227.14) / $140.63
Common mistakes to avoid
If your margin of safety feels off, it's almost always one of these.
Treating one estimate as precise
Intrinsic value is a range, not a single number. Run a low, base, and high case rather than anchoring to one figure.
Ignoring business quality
A 25 percent margin on a fragile, cyclical company is riskier than the same margin on a durable compounder. The quality of the business changes how much cushion you need.
Using an aggressive growth rate
Plugging in a high growth rate inflates intrinsic value and erases your margin without you noticing. Lean conservative on every assumption.
Forgetting the discount rate
A future price is not a present value. Skipping the discount step makes nearly every stock look cheaper than it is.
Frequently asked questions
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