Most investors react to price. Fewer ask what a stock is actually worth.
Fair value is an estimate of a company's intrinsic worth — built on its fundamentals, not market sentiment. Three things worth knowing:
— It blends three methods: DCF (50%), relative valuation against sector peers (30%), and analyst consensus (20%). No single method is reliable on its own.
— The gap between market price and fair value is where opportunity lives. Below fair value, you have a margin of safety. Above it, you're paying a premium.
— It's a starting point for analysis, not a guarantee.
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