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REDDIT

Real FCF Yield calculation question

R
Jul 18, 2026 · 18:34

Hi everyone,

I'm looking to get some feedback on how you handle Stock-Based Compensation (SBC) adjustments when calculating Free Cash Flow (FCF) Yield, especially for high-growth tech stocks and when they repurchase at the same time as diluting ($DUOL for example).

Do you use (FCF-SBC)/(Market cap) or something more sophisticated?

Thanks.