FREE TOOL
Margin of Safety Calculator
See whether a stock trades far enough below its intrinsic value to buy. Search any of 37,000+ stocks and this calculator auto-fills a real intrinsic value estimate — the only margin of safety calculator online that can.
INTERACTIVE CALCULATOR
Margin of Safety Calculator
Compare a stock's price to its intrinsic value and see whether the discount clears your safety requirement.
SEARCH STOCK
Search to auto-fill intrinsic value and price with real data
Enter an intrinsic value and stock price to calculate the margin of safety
For educational purposes only. Not investment advice.
How to Use This Calculator
Enter the Intrinsic Value Per Share — your estimate of what the business is actually worth. You can type in your own figure from a DCF or other valuation, or search a stock above to auto-fill Fair Price Index's blended fair value (DCF + relative valuation + analyst consensus), updated daily.
Enter the Current Stock Price. The calculator compares it to intrinsic value and shows the actual margin of safety — the percentage discount (or premium) to your estimate.
Set your Required Margin of Safety (default 25%). You'll get a buy-below price — the maximum you can pay while keeping that buffer — and a verdict showing whether the stock clears your requirement today.
The Margin of Safety Formula
MARGIN OF SAFETY
MOS % = (Intrinsic Value − Price) ÷ Intrinsic Value
BUY-BELOW PRICE
Buy-Below Price = Intrinsic Value × (1 − Required Margin)
The margin of safety measures the gap between what a stock is worth and what it costs, expressed as a percentage of intrinsic value. A stock worth $100 trading at $70 has a 30% margin of safety: even if your valuation turns out to be 20% too optimistic, you still paid less than the business is worth.
The buy-below price flips the same idea into an actionable limit order: it's the highest price that still preserves your required buffer. Value investors often calculate it once and then simply wait for the market to come to them.
How Much Margin Do You Need?
20–30%
Stable blue chips
Predictable earnings, strong balance sheets, durable moats. Valuation error is smaller, so a smaller buffer suffices.
30–40%
Average uncertainty
Decent businesses with moderate competition or execution risk. Most stocks fall in this bucket.
40–50%+
Cyclicals & turnarounds
Commodity producers, deep cyclicals, and turnaround stories where intrinsic value itself is a wide guess.
Benjamin Graham, who coined the term, typically wanted to buy at about two-thirds of intrinsic value — roughly a 33% margin of safety. Warren Buffett relaxed the number for truly exceptional businesses, arguing that a wonderful company at a fair price beats a fair company at a wonderful price — but he never dropped the principle itself, calling margin of safety the three most important words in investing.
The right number for you depends on how confident you are in your intrinsic value estimate. The less predictable the business, the wider the buffer you should demand.
Stock Investing vs Accounting Margin of Safety
"Margin of safety" also exists in managerial accounting, where it measures how far sales can fall before a company hits its break-even point (current sales minus break-even sales). This page covers the investing concept: the discount between a stock's market price and its intrinsic value. If you're looking for the break-even version, you'll need a cost-volume-profit calculator instead.
Frequently Asked Questions
What is a good margin of safety?
Most value investors require a margin of safety between 20% and 50%, depending on how predictable the business is. Benjamin Graham suggested buying at roughly two-thirds of intrinsic value (about a 33% margin). For stable blue chips, 20-30% is common; for average companies, 30-40%; and for cyclicals or turnarounds, many investors demand 40-50% or more.
Where does the auto-filled intrinsic value come from?
When you search a stock, the calculator fills the intrinsic value with Fair Price Index's blended fair value per share. It combines a discounted cash flow (DCF) model, relative valuation versus peers, and analyst consensus targets, and is updated daily for 37,000+ stocks. You can always override it with your own estimate.
How is the margin of safety calculated?
Margin of safety = (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100. If a stock is worth $100 per share and trades at $70, the margin of safety is 30%. A positive number means the stock trades at a discount to intrinsic value; a negative number means it trades above it.
What is a buy-below price?
The buy-below price is the maximum price you can pay while still keeping your required margin of safety. It is calculated as Intrinsic Value × (1 − Required Margin). With a $100 intrinsic value and a 25% required margin, your buy-below price is $75.
Why do I need a margin of safety at all?
Every intrinsic value estimate is imprecise — growth, margins, and discount rates are all assumptions. Buying well below your estimate creates a buffer, so even if your valuation is somewhat too optimistic, you can still earn a reasonable return and limit permanent capital loss.
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This calculator is for educational purposes only and does not constitute investment advice. Intrinsic value estimates — including auto-filled fair values — are model outputs based on assumptions and should not be used as the sole basis for investment decisions.