A normal DCF asks: what would this business be worth if it grew at X%? The trouble is that you get to pick X, and the pull to choose the X that justifies a stock you already like is strong.
A reverse DCF turns the question around. Given today's price, the cost of capital, the long-run growth rate, and how many years you project, what early-years growth rate must the market be quietly assuming?
The math: search across a sensible range of growth rates (usually -10% to +50%) for the one that, when run through a normal two-stage DCF with all the same other assumptions, produces exactly today's price.
How to read it: • Implied growth far below the past 5 years of actual growth: the market is doubtful. That could be a bargain, or the market could be sensing trouble the financials do not show yet. • Implied growth about equal to the past 5 years: the market expects more of the same, which is neutral. • Implied growth far above the past 5 years: the market expects things to speed up, which needs a real reason in the business, not just hope.
It is not a buy or sell signal. It is a way to lay bare the assumptions hidden in today's price so you can argue with them.