The Present Value of Growth Opportunities (PVGO) is a financial metric that represents the present value of a company’s future growth opportunities. It is calculated as the difference between the company’s current stock price and the discounted value of its future cash flows.

The formula is as follows:

\[\text{PVGO} = \text{Stock Price} - \text{Earnings Per Share} / \text{Weighted Average Cost of Capital}\]

Also known as: PVGO, growth value.

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Calculate the Present Value of Growth Opportunities (PVGO) in Python

The Present Value of Growth Opportunities (PVGO) is available in the Models module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_present_value_of_growth_opportunities as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

toolkit.models.get_present_value_of_growth_opportunities()

Which returns:

  AAPL TSLA
2021 160.807 348.912
2022 154.58 133.203
2023 168.39 239.608
2024 222.742 399.662
2025 232.279 446.273

Parameters

get_present_value_of_growth_opportunities accepts the following parameters:

  • calculate_daily (bool, optional): Whether to calculate the PVGO using daily historical data. Defaults to False.
  • diluted (bool, optional): Whether to use diluted shares in the calculation. Defaults to True.
  • include_dividends (bool, optional): Whether to deduct Preferred Dividends Paid from Net Income when calculating the Earnings per Share, so that the earnings figure reflects what is attributable to common shareholders only. Defaults to False.
  • trailing (int | None, optional): The trailing period to use for the calculation. Defaults to None.
  • rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
  • growth (bool, optional): Whether to calculate the growth of the values. Defaults to False.
  • lag (int | list[int], optional): The lag to use for the growth calculation. Defaults to 1.
  • standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
Economic Value Added (EVA) Intrinsic Valuation Gordon Growth Model (GGM) Altman Z-Score Piotroski Score Beneish M-Score Sustainable Growth Rate (SGR) Internal Growth Rate (IGR) Graham Number Free Cash Flow to Firm (FCFF) Free Cash Flow to Equity (FCFE) Two-Stage Dividend Discount Model

The Models module page introduces the module, and the sidebar lists all of its functions.

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