EDUCATION
Learn Stock Valuation
Free guides covering everything from basic valuation concepts to advanced financial models. No signup required.
What Is Fair Value? A Simple Guide for Investors
Learn what fair value means, how it is calculated using DCF, relative valuation, and analyst consensus, and how to use it to find overvalued and undervalued stocks. Includes real examples and formulas.
Read the guide →UNDERSTAND VALUATION
Core Valuation Concepts
What determines whether a stock is cheap or expensive? Start here to understand the foundational ideas behind every valuation method.
What Is Fair Value? A Simple Guide for Investors
Learn what fair value means, how it is calculated using DCF, relative valuation, and analyst consensus, and how to use it to find overvalued and undervalued stocks. Includes real examples and formulas.
Read →What Is Intrinsic Value? How to Calculate a Stock's True Worth
Learn what intrinsic value means in investing, how it differs from market price, the three main methods to calculate it (DCF, relative valuation, asset-based), and how to use it to find undervalued stocks. Includes formula, examples, and common mistakes.
Read →How to Tell If a Stock Is Overvalued or Undervalued
Learn the key methods investors use to determine whether a stock is priced above or below its real worth. Includes fair value comparison, valuation ratios, 5 warning signs of overvaluation, real examples, value traps, and a step-by-step checklist.
Read →What Is Margin of Safety? Warren Buffett's Key Investing Principle
Learn what margin of safety means in investing, how to calculate it, what percentage Warren Buffett and Benjamin Graham recommend, and how to apply it to your stock picks. Includes real examples.
Read →How to Read Stock Fundamentals: P/E, ROE, and Dividend Yield
Learn the three most important stock metrics every investor needs: P/E ratio, Return on Equity, and Dividend Yield. Includes formulas, real stock examples, sector comparisons, and how to use all three together.
Read →VALUATION METHODS
How to Value a Stock
The specific models and ratios analysts use to calculate what a stock is worth. Each method answers a different question about value.
How to Value a Stock: 5 Methods Every Investor Should Know
Learn 5 proven methods to determine whether a stock is fairly priced: DCF analysis, P/E ratio, EV/EBITDA, Graham Number, and free cash flow yield. Includes when to use each method, real examples, and a step-by-step framework.
Read →P/E Ratio Explained: What It Tells You About a Stock
Learn what the P/E ratio is, how to calculate it with the formula, what counts as a good P/E ratio by sector, and how to use it to find undervalued stocks. Includes interactive calculator, real stock examples, and sector averages table.
Read →PEG Ratio Explained: How to Judge a P/E by Its Growth
What the PEG ratio is, how to calculate P/E relative to earnings growth, what counts as cheap or expensive, and the pitfalls Peter Lynch's metric hides.
Read →EV/EBITDA Explained: A Better Valuation Metric Than P/E?
Learn what EV/EBITDA is, how to calculate it step by step with our free calculator, what counts as a good ratio by sector, and why analysts prefer it over P/E. Includes formula, real examples, sector benchmarks, and common mistakes.
Read →Comparable Company Analysis: How to Value a Stock Against Its Peers
How comparable company analysis works: building a peer group, choosing multiples like EV/EBITDA and P/E, applying the median, and the pitfalls to avoid.
Read →DCF Model Explained: How Discounted Cash Flow Analysis Works
Learn how the DCF model works step by step, including the formula, how to project cash flows, choose a discount rate, calculate terminal value, and interpret the result. Includes practical examples.
Read →What Is DCF? A Beginner's Guide to Discounted Cash Flow
Learn what Discounted Cash Flow (DCF) means in simple terms, why it matters for stock investors, the three key ingredients of any DCF analysis, and how Fair Price Index uses it. Beginner-friendly guide.
Read →The Graham Number: Benjamin Graham's Formula for Finding Undervalued Stocks
Learn the Graham Number formula, calculate it instantly with our free interactive calculator, see real stock examples with a comparison table, and understand when Benjamin Graham's classic valuation method works and when it does not.
Read →Dividend Discount Model (DDM): How to Value a Stock by Its Dividends
Learn the dividend discount model and Gordon Growth formula step by step: estimating D1, cost of equity, growth, worked examples, and when DDM breaks down.
Read →Free Cash Flow Explained: Why It Matters More Than Earnings
Learn what free cash flow is, how to calculate it, why it is more reliable than net income, what good FCF looks like, and how to use FCF yield in stock analysis. Includes formula, examples, and red flags.
Read →How to Build a Multi-Stage DCF Model
Learn how to build a two-stage and three-stage DCF model step by step. Covers high-growth phase, transition phase, terminal value, sensitivity analysis, and common mistakes. Includes formulas and a worked example.
Read →Terminal Value in DCF: Why One Number Drives Most of Your Valuation
Terminal value often makes up 60-80% of a DCF valuation. Learn the Gordon Growth and exit multiple methods, worked examples, and the mistakes to avoid.
Read →Reverse DCF: How to Find the Growth Rate the Market Is Pricing In
Reverse DCF flips valuation: start from the stock price and solve for the growth the market is pricing in. Step-by-step method, worked example, and limits.
Read →CAPM and the Cost of Equity: The Discount Rate That Drives Every DCF
The cost of equity is the return investors demand for owning a stock. Learn the CAPM formula, its three inputs, and why it drives every DCF fair value.
Read →Adjusting WACC for Country Risk: How to Value International Stocks
Learn how to adjust the discount rate for country risk when valuing stocks in emerging and frontier markets. Covers country risk premium, sovereign spread method, Damodaran approach, and practical examples for international DCF analysis.
Read →READING THE NUMBERS
Reading Financial Statements
Every valuation starts with the raw financial statements. Learn to read the three core reports every public company files — and to spot the red flags hiding in them.
How to Read an Income Statement: A Line-by-Line Guide for Investors
Learn to read an income statement line by line: revenue, margins, EPS, GAAP vs. adjusted earnings, plus a worked example and the red flags investors miss.
Read →How to Read a Balance Sheet: A Step-by-Step Guide
Learn to read a balance sheet step by step: assets, liabilities, equity, ratios like current ratio and debt-to-equity, and red flags — with a worked example.
Read →How to Read a Cash Flow Statement: A Step-by-Step Guide
Learn to read a cash flow statement step by step: operating, investing, and financing sections, free cash flow, and the red flags that earnings can hide.
Read →COMPANY QUALITY
Financial Health & Quality
Valuation tells you the price. These metrics tell you whether the business behind it is strong — profitability, capital efficiency, and bankruptcy risk.
Altman Z-Score: How to Measure Bankruptcy Risk
Learn how the Altman Z-Score predicts bankruptcy risk using five financial ratios. Covers the formula, the three safety zones, the non-manufacturer and emerging-market variants, worked examples, and how to use it alongside valuation.
Read →Piotroski F-Score: A 9-Point Test for Financial Strength
Learn how the Piotroski F-Score scores a company's financial strength across nine accounting tests covering profitability, leverage, and operating efficiency. Includes the full checklist, scoring, worked example, and how to use it to avoid value traps.
Read →ROIC: The Metric That Reveals True Value Creation
Learn what Return on Invested Capital measures, how to calculate it with the formula, why it matters more than ROE, how it compares to the cost of capital, and how to use it to find quality businesses. Includes worked examples.
Read →Profit Margins Explained: Gross, Operating, and Net
Learn the three key profit margins — gross, operating, and net — what each one reveals about a business, how to calculate them, why they differ by sector, and how to use the gaps between them to spot problems. Includes formulas and worked examples.
Read →Owner Earnings: Buffett's Formula for What a Business Really Makes
Learn Warren Buffett's owner earnings formula: net income plus non-cash charges minus maintenance capex, with worked examples and earnings quality red flags.
Read →Buybacks and Capital Allocation: How Management Creates (or Destroys) Value
Learn how buybacks, dividends, reinvestment, debt paydown, and M&A create or destroy shareholder value — with exact worked examples and red flags to watch.
Read →VALUING BY SECTOR
Sector-Specific Valuation
One valuation toolkit does not fit every business. Learn which metrics actually work for banks, REITs, and cyclical companies — and why the standard ones mislead.
Why Sector Determines How You Should Value a Stock
Why a P/E of 12 is expensive for an automaker but cheap for software — how sector determines the right valuation metric, from bank P/B to REIT FFO and AFFO.
Read →How to Value Bank Stocks: P/B, ROE, and the Justified Price-to-Book Formula
Learn why P/B and ROE — not EV/EBITDA or a standard DCF — drive bank valuation. Justified P/B formula, tangible book, CET1, credit risk, and red flags.
Read →How to Value REIT Stocks: FFO, AFFO, and NAV Explained
Why P/E ratios mislead for REITs and how to value them properly with FFO, AFFO, P/FFO multiples, NAV, and cap rates — with worked examples and red flags.
Read →How to Value Cyclical Stocks: Normalized Earnings and the Peak-P/E Trap
Cyclical stocks look cheapest at the peak and priciest at the trough. Learn normalized earnings, historic trough P/B ranges, and balance-sheet survival tests.
Read →QUICK REFERENCE
Tools & Reference
Interactive calculators and definitions to support your analysis.
Valuation Tools
From DCF and reverse DCF to Graham Number, PEG, and WACC.
Open tools →46 TERMSInvestment Glossary
Clear definitions of essential investing and valuation terms.
Browse glossary →OUR MODELFPI Methodology
How we calculate fair price and the FPI Rating for the top 10K stocks.
Learn more →APPLY WHAT YOU LEARN
See fair values for the top 10K stocks
Fair Price Index calculates daily fair values using DCF, relative valuation, and analyst consensus. Check any stock instantly.
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