This article from Fidelity.com discusses the details of each of the 4 inputs to the DCF model and analyzed their possible moves and the resulting impact on stock valuations.
"In my view, interest rates are repressed by the Fed, and this will likely continue for a long time. That means that the stock market is 25% higher than it would otherwise be, but this can remain the case for a long time. Having said that, at 1.3% the 10-year yield probably has more upside than downside, and, all else being equal, that should be a drag on valuation.
In my view, only an earnings decline or regulatory action will slow this train. As long as rates are low and companies produce more free cash flow than they can put to use, they will buy back shares, inflating EPS and raising the payout ratio in the process.
Finally, while there have been pockets of exuberance and speculation in the markets, as a veteran of 36 years of market cycles I just don't see the bell-ringing signs that the market as a whole has reached a sentiment extreme.
A bubble? No, not in the classic sense. Distortions through policy and financial engineering? You bet. Can it last? You bet. For how long? Well, my secular bull market roadmap suggests another 5–7 years of outsized returns. So I'll go with that."