# Fair Price Index

> Fair Price Index (fairpriceindex.com) provides institutional-grade fair value estimates for the top 10K stocks, updated daily. Fair value is calculated with a blended model: discounted cash flow (50%), relative valuation against sector peers (30%), and analyst consensus (20%). The FPI Rating scores company quality 0-10. Built by Bulios s.r.o.

## Key pages

- [Methodology](https://www.fairpriceindex.com/methodology): How fair values and FPI Ratings are calculated
- [Valuation Model](https://www.fairpriceindex.com/methodology/valuation-model): The DCF + relative + consensus blend explained
- [FPI Rating](https://www.fairpriceindex.com/methodology/fpi-rating): The 0-10 company quality score explained
- [Browse Stocks](https://www.fairpriceindex.com/stocks): Fair value data for the top 10K stocks
- [Market Index](https://www.fairpriceindex.com/market-index): Daily market-wide valuation gauge with weekly reports
- [FAQ](https://www.fairpriceindex.com/faq): Common questions about data, pricing, and the app

## Education

Free guides on stock valuation, from beginner to advanced:

- [What Is Fair Value? A Simple Guide for Investors](https://www.fairpriceindex.com/education/what-is-fair-value): 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.
- [DCF Model Explained: How Discounted Cash Flow Analysis Works](https://www.fairpriceindex.com/education/dcf-model-explained): 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.
- [P/E Ratio Explained: What It Tells You About a Stock](https://www.fairpriceindex.com/education/pe-ratio-explained): 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.
- [The Graham Number: Benjamin Graham's Formula for Finding Undervalued Stocks](https://www.fairpriceindex.com/education/graham-number): 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.
- [What Is Margin of Safety? Warren Buffett's Key Investing Principle](https://www.fairpriceindex.com/education/margin-of-safety): 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.
- [How to Read Stock Fundamentals: P/E, ROE, and Dividend Yield](https://www.fairpriceindex.com/education/stock-fundamentals-guide): 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.
- [EV/EBITDA Explained: A Better Valuation Metric Than P/E?](https://www.fairpriceindex.com/education/ev-ebitda-explained): 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.
- [How to Tell If a Stock Is Overvalued or Undervalued](https://www.fairpriceindex.com/education/overvalued-vs-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.
- [What Is DCF? A Beginner's Guide to Discounted Cash Flow](https://www.fairpriceindex.com/education/what-is-dcf): 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.
- [Free Cash Flow Explained: Why It Matters More Than Earnings](https://www.fairpriceindex.com/education/free-cash-flow-explained): 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.
- [What Is Intrinsic Value? How to Calculate a Stock's True Worth](https://www.fairpriceindex.com/education/what-is-intrinsic-value): 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.
- [How to Value a Stock: 5 Methods Every Investor Should Know](https://www.fairpriceindex.com/education/how-to-value-a-stock): 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.
- [How to Build a Multi-Stage DCF Model](https://www.fairpriceindex.com/education/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.
- [Adjusting WACC for Country Risk: How to Value International Stocks](https://www.fairpriceindex.com/education/wacc-country-risk): 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.
- [Altman Z-Score: How to Measure Bankruptcy Risk](https://www.fairpriceindex.com/education/altman-z-score): 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.
- [Piotroski F-Score: A 9-Point Test for Financial Strength](https://www.fairpriceindex.com/education/piotroski-f-score): 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.
- [ROIC: The Metric That Reveals True Value Creation](https://www.fairpriceindex.com/education/roic): 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.
- [Profit Margins Explained: Gross, Operating, and Net](https://www.fairpriceindex.com/education/profit-margins-explained): 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.
- [PEG Ratio Explained: How to Judge a P/E by Its Growth](https://www.fairpriceindex.com/education/peg-ratio-explained): 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.
- [Dividend Discount Model (DDM): How to Value a Stock by Its Dividends](https://www.fairpriceindex.com/education/dividend-discount-model): 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.
- [Terminal Value in DCF: Why One Number Drives Most of Your Valuation](https://www.fairpriceindex.com/education/terminal-value-explained): 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.
- [Reverse DCF: How to Find the Growth Rate the Market Is Pricing In](https://www.fairpriceindex.com/education/reverse-dcf): 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.
- [How to Read an Income Statement: A Line-by-Line Guide for Investors](https://www.fairpriceindex.com/education/how-to-read-income-statement): 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.
- [How to Read a Balance Sheet: A Step-by-Step Guide](https://www.fairpriceindex.com/education/how-to-read-balance-sheet): 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.
- [How to Read a Cash Flow Statement: A Step-by-Step Guide](https://www.fairpriceindex.com/education/how-to-read-cash-flow-statement): 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.
- [Why Sector Determines How You Should Value a Stock](https://www.fairpriceindex.com/education/sector-specific-valuation): 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.
- [How to Value Bank Stocks: P/B, ROE, and the Justified Price-to-Book Formula](https://www.fairpriceindex.com/education/how-to-value-bank-stocks): 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.
- [How to Value REIT Stocks: FFO, AFFO, and NAV Explained](https://www.fairpriceindex.com/education/how-to-value-reit-stocks): 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.
- [How to Value Cyclical Stocks: Normalized Earnings and the Peak-P/E Trap](https://www.fairpriceindex.com/education/how-to-value-cyclical-stocks): 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.
- [Comparable Company Analysis: How to Value a Stock Against Its Peers](https://www.fairpriceindex.com/education/comparable-company-analysis): 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.
- [CAPM and the Cost of Equity: The Discount Rate That Drives Every DCF](https://www.fairpriceindex.com/education/capm-cost-of-equity): 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.
- [Owner Earnings: Buffett's Formula for What a Business Really Makes](https://www.fairpriceindex.com/education/owner-earnings): Learn Warren Buffett's owner earnings formula: net income plus non-cash charges minus maintenance capex, with worked examples and earnings quality red flags.
- [Buybacks and Capital Allocation: How Management Creates (or Destroys) Value](https://www.fairpriceindex.com/education/buybacks-and-capital-allocation): Learn how buybacks, dividends, reinvestment, debt paydown, and M&A create or destroy shareholder value — with exact worked examples and red flags to watch.

## Tools

- [DCF Calculator](https://www.fairpriceindex.com/tools/dcf-calculator): Fair value from cash flow, growth, and discount rate
- [P/E Ratio Calculator](https://www.fairpriceindex.com/tools/pe-ratio-calculator): Price-to-earnings with sector benchmarks
- [EV/EBITDA Calculator](https://www.fairpriceindex.com/tools/ev-ebitda-calculator): Debt-adjusted valuation multiple
- [Graham Number Calculator](https://www.fairpriceindex.com/tools/graham-number-calculator): Benjamin Graham's maximum price
- [Margin of Safety Calculator](https://www.fairpriceindex.com/tools/margin-of-safety-calculator): Discount to intrinsic value, auto-filled from FPI fair value data
- [Reverse DCF Calculator](https://www.fairpriceindex.com/tools/reverse-dcf-calculator): The FCF growth rate implied by the current price
- [Dividend Discount Model Calculator](https://www.fairpriceindex.com/tools/dividend-discount-model-calculator): Gordon Growth valuation from the dividend stream
- [Intrinsic Value Calculator](https://www.fairpriceindex.com/tools/intrinsic-value-calculator): Graham's growth formula with FPI's three-model fair value alongside
- [PEG Ratio Calculator](https://www.fairpriceindex.com/tools/peg-ratio-calculator): P/E adjusted for growth, with PEGY support
- [WACC Calculator](https://www.fairpriceindex.com/tools/wacc-calculator): CAPM cost of equity and weighted average cost of capital

## Glossary

- [Fair Value](https://www.fairpriceindex.com/glossary/fair-value): The estimated intrinsic worth of a stock based on fundamental analysis rather than its current market price.
- [Discounted Cash Flow (DCF)](https://www.fairpriceindex.com/glossary/dcf): A valuation method that projects future cash flows and discounts them to present value using an appropriate discount rate.
- [Price-to-Earnings Ratio (P/E)](https://www.fairpriceindex.com/glossary/pe-ratio): Stock price divided by earnings per share, indicating how much investors pay for each dollar of earnings.
- [Return on Equity (ROE)](https://www.fairpriceindex.com/glossary/roe): Net income divided by shareholder equity, measuring how efficiently a company generates profit from shareholder investments.
- [Dividend Yield](https://www.fairpriceindex.com/glossary/dividend-yield): Annual dividend payment divided by stock price, expressed as a percentage of return from dividends alone.
- [Market Capitalization](https://www.fairpriceindex.com/glossary/market-cap): The total market value of a company's outstanding shares, calculated as stock price times shares outstanding.
- [Margin of Safety](https://www.fairpriceindex.com/glossary/margin-of-safety): The difference between a stock's intrinsic value and its market price, providing a cushion against analysis errors.
- [Intrinsic Value](https://www.fairpriceindex.com/glossary/intrinsic-value): The true underlying worth of a company based on fundamental analysis, independent of market sentiment.
- [Overvalued](https://www.fairpriceindex.com/glossary/overvalued): A stock trading significantly above its calculated fair value, where investors pay a premium relative to fundamentals.
- [Undervalued](https://www.fairpriceindex.com/glossary/undervalued): A stock trading significantly below its calculated fair value, potentially offering a buying opportunity with margin of safety.
- [Earnings Per Share (EPS)](https://www.fairpriceindex.com/glossary/eps): Net income divided by shares outstanding, representing the profit allocated to each share of common stock.
- [EBITDA](https://www.fairpriceindex.com/glossary/ebitda): Earnings Before Interest, Taxes, Depreciation, and Amortization, measuring operating profitability independent of capital structure.
- [Free Cash Flow (FCF)](https://www.fairpriceindex.com/glossary/free-cash-flow): Cash generated by operations minus capital expenditures, representing cash available to shareholders and debt holders.
- [Book Value](https://www.fairpriceindex.com/glossary/book-value): Total assets minus total liabilities, representing the net asset value of a company on its balance sheet.
- [WACC](https://www.fairpriceindex.com/glossary/wacc): Weighted Average Cost of Capital, the discount rate used in DCF analysis reflecting the blended cost of debt and equity financing.
- [Terminal Value](https://www.fairpriceindex.com/glossary/terminal-value): The estimated value of a business beyond the explicit DCF projection period, capturing all future cash flows in perpetuity.
- [Relative Valuation](https://www.fairpriceindex.com/glossary/relative-valuation): Comparing a stock's valuation multiples against sector peers to determine if it is cheap or expensive relative to similar companies.
- [Graham Number](https://www.fairpriceindex.com/glossary/graham-number): Benjamin Graham's formula combining P/E and P/B into a single valuation metric to identify undervalued stocks.
- [Price-to-Book Ratio (P/B)](https://www.fairpriceindex.com/glossary/price-to-book): Stock price divided by book value per share, comparing market valuation to net asset value on the balance sheet.
- [Analyst Consensus](https://www.fairpriceindex.com/glossary/analyst-consensus): Aggregated price targets from Wall Street analysts, representing the average professional estimate of a stock's future value.
- [FPI Rating](https://www.fairpriceindex.com/glossary/fpi-rating): A proprietary 0–10 score measuring overall company quality based on six fundamental factors, Piotroski F-Score, and Altman Z-Score.
- [Piotroski F-Score](https://www.fairpriceindex.com/glossary/piotroski-f-score): A 0–9 scoring system that evaluates a company's financial strength through nine binary accounting tests.
- [Altman Z-Score](https://www.fairpriceindex.com/glossary/altman-z-score): A formula predicting the probability of corporate bankruptcy within two years by combining five financial ratios.
- [EV/EBITDA](https://www.fairpriceindex.com/glossary/ev-ebitda): Enterprise Value divided by EBITDA, a debt-adjusted valuation ratio comparing what a company costs to acquire versus what it earns.
- [Enterprise Value (EV)](https://www.fairpriceindex.com/glossary/enterprise-value): The total cost of acquiring a company, calculated as market capitalization plus debt minus cash.
- [Return on Invested Capital (ROIC)](https://www.fairpriceindex.com/glossary/roic): The percentage return a company generates on all capital invested in its operations, measuring true value creation.
- [PEG Ratio](https://www.fairpriceindex.com/glossary/peg-ratio): P/E ratio divided by expected earnings growth rate, adjusting valuation for growth to identify stocks priced fairly relative to their expansion.
- [Beta](https://www.fairpriceindex.com/glossary/beta): A measure of a stock's price volatility relative to the overall market, where 1.0 equals market-average volatility.
- [Operating Margin](https://www.fairpriceindex.com/glossary/operating-margin): Operating income divided by revenue, showing what percentage of each sales dollar remains as profit from core operations.
- [Net Margin](https://www.fairpriceindex.com/glossary/net-margin): Net income divided by revenue, representing the percentage of each sales dollar that becomes actual profit after all expenses.
- [Free Cash Flow Yield](https://www.fairpriceindex.com/glossary/free-cash-flow-yield): Free cash flow per share divided by stock price, showing how much real cash a business generates relative to what you pay for it.
- [Debt-to-Equity Ratio](https://www.fairpriceindex.com/glossary/debt-to-equity): Total debt divided by shareholder equity, measuring how much a company relies on borrowed money versus its own capital.
- [Value Trap](https://www.fairpriceindex.com/glossary/value-trap): A stock that appears cheap by valuation metrics but continues declining because the underlying business is fundamentally deteriorating.
- [Price-to-Sales Ratio (P/S)](https://www.fairpriceindex.com/glossary/price-to-sales): Market capitalization divided by annual revenue, used to value companies that are not yet profitable or have volatile earnings.
- [Earnings Yield](https://www.fairpriceindex.com/glossary/earnings-yield): Earnings per share divided by stock price, the inverse of P/E, expressing earnings as a percentage return on the stock price.
- [Dividend Payout Ratio](https://www.fairpriceindex.com/glossary/dividend-payout-ratio): The percentage of net income paid out as dividends, indicating how much profit a company returns to shareholders versus reinvests.
- [Revenue](https://www.fairpriceindex.com/glossary/revenue): The total income a company generates from selling goods or services before any expenses are deducted, also called the top line.
- [Net Income](https://www.fairpriceindex.com/glossary/net-income): Total profit after all expenses, taxes, and interest are deducted from revenue, also called the bottom line or net profit.
- [Capital Expenditures (CapEx)](https://www.fairpriceindex.com/glossary/capex): Spending on long-term assets like property, equipment, and technology that sustain or expand business operations.
- [Shares Outstanding](https://www.fairpriceindex.com/glossary/shares-outstanding): The total number of a company's shares currently held by all shareholders, used to calculate EPS and market capitalization.
- [Cost of Equity](https://www.fairpriceindex.com/glossary/cost-of-equity): The return shareholders require for investing in a company, reflecting the risk of owning that stock compared to risk-free alternatives.
- [Bull Market / Bear Market](https://www.fairpriceindex.com/glossary/bull-bear-market): A bull market is a sustained period of rising prices (20%+ gain); a bear market is a sustained decline (20%+ drop from peak).
- [Stock Split](https://www.fairpriceindex.com/glossary/stock-split): Dividing existing shares into more shares at a proportionally lower price, increasing share count without changing company value.
- [Funds From Operations (FFO)](https://www.fairpriceindex.com/glossary/ffo): A REIT's real earnings power: net income with property depreciation added back and gains on property sales removed.
- [Net Interest Margin (NIM)](https://www.fairpriceindex.com/glossary/net-interest-margin): The spread a bank earns between interest received on loans and interest paid on deposits, relative to its earning assets.
- [Capitalization Rate (Cap Rate)](https://www.fairpriceindex.com/glossary/cap-rate): A property's net operating income divided by its value — the yield real estate investors use to price income-producing property.

## Full content

- [llms-full.txt](https://www.fairpriceindex.com/llms-full.txt): Complete text of all education articles and glossary terms