Stock Valuation

Stock valuation refers to the process of determining the intrinsic value of a company’s shares. This assessment helps investors understand the worth of a stock in relation to its current market price, aiding in investment decisions. Various methods are used for stock valuation, including fundamental analysis, which evaluates a company’s financial health and overall economic conditions, and technical analysis, which analyzes price movements and trading volumes. Common valuation techniques include the price-to-earnings (P/E) ratio, discounted cash flow (DCF) analysis, and comparing financial metrics with those of similar companies. The goal of stock valuation is to identify whether a stock is overvalued, undervalued, or fairly priced, thereby enabling investors to make informed decisions about buying, holding, or selling stocks.