FPI MARKET INDEX
LATEST WEEKLY REPORT
The market looks about 10% pricier than fair value, and it nudged up this week
The market is 10.5% overvalued.
The FPI Market Index is a daily benchmark of global market valuation — combining DCF analysis, relative valuation, and analyst consensus into a single number. One clear signal of whether markets are trading above, below, or near their fair value.
FPI MARKET INDEX · Oct 12
Updated daily after market close
Model: DCF 50% · Relative 30% · Consensus 20%
INDEX TREND
The market has 10.5% median downside to fair value. Over the past 21 days, the average downside was 8.7%.
21 days of data · Median downside/upside across 1013 stocks. Updated daily after market close. Fair price is a model-based estimate combining DCF (50%), relative valuation (30%), and analyst consensus (20%).
BY SECTOR
BY REGION
THE TRANSATLANTIC GAP
UNITED STATES
+10.4%
906 STOCKS
EUROPE
+12.1%
102 STOCKS
SPREAD
1.7 pp
THE US TRADES CHEAPER
The median US stock trades 10.4% above fair value versus 12.1% above for the median European stock — a 1.7-point valuation gap in favor of the US. Note the sample sizes: European coverage is currently a fraction of the US universe, so read the European median as indicative. Expanding it is on our methodology roadmap.
EXPLORE INDIVIDUAL STOCKS
The FPI Market Index shows the big picture. To analyze individual stocks, use our free calculators or browse the full stock list.
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METHODOLOGY
The FPI Market Index calculates the median downside/upside across 1013 stocks tracked daily. Each stock's fair price is computed using a blended model: DCF analysis (50%), relative valuation using P/E and EV/EBITDA (30%), and analyst consensus (20%). The index uses median rather than mean to reduce the impact of outliers. Read more about our valuation model.
FPI Market Index is for informational purposes only and does not constitute investment advice. The index reflects model-based estimates updated daily after market close. Sector breakdowns require a minimum of 3 stocks per group.
FAQ
Is the stock market overvalued right now?+
Based on the FPI Market Index, the median stock has 10.5% downside to its fair value, suggesting the market is currently overvalued. This is based on 1013 stocks analyzed daily using DCF analysis, relative valuation, and analyst consensus. The index has been trending upward, suggesting the market is becoming more overvalued.
What is the FPI Market Index?+
The FPI Market Index is a daily measure of overall stock market valuation. It calculates the median downside or upside across 1013 major stocks by comparing each stock's market price to its model-derived fair value. A positive value indicates the typical stock trades above fair value (downside risk), while a negative value indicates it trades below (upside potential).
How is the FPI Market Index calculated?+
For each of the 1013 stocks tracked, we calculate fair price using a blended model: DCF analysis (50% weight), relative valuation against sector peers using P/E and EV/EBITDA (30%), and analyst consensus price targets (20%). The index then takes the median of all individual downside/upside percentages. We use median instead of mean to reduce the impact of extreme outliers.
Which sector is the most overvalued?+
Currently, Technology is the most overvalued sector with a median of 32.1% downside. Sector medians are calculated the same way as the overall index — by taking the median downside/upside of all stocks within each sector.
Which sector is the most undervalued?+
Financial Services is currently the most undervalued sector with a median of 30.3% upside. This suggests stocks in the Financial Services sector are trading at the largest discount to their calculated fair values compared to other sectors.
How often is the FPI Market Index updated?+
The index is updated daily after market close. Fair prices for all tracked stocks are recalculated each day, and the index reflects the most recent available data.
What does downside and upside mean?+
Downside means the percentage the market price would need to fall to reach fair value — indicating the stock is trading above its estimated worth. Upside means the percentage the market price could rise to reach fair value — indicating a potential value opportunity. The FPI Market Index uses five zones: overvalued (above 10% downside), slightly overvalued (5-10% downside), near fair value (within 5%), slightly undervalued (5-10% upside), and undervalued (above 10% upside).
Can I use the FPI Market Index for investment decisions?+
The FPI Market Index is an informational tool, not investment advice. It provides a data-driven perspective on overall market valuation, but investment decisions should consider many additional factors including your personal financial situation, risk tolerance, and investment horizon. Always do your own research.
Fair Price Index is for informational purposes only and does not constitute investment advice. Fair value calculations are model-based estimates and may not reflect actual market conditions. Always conduct your own research before making investment decisions.