stock valuation models

Stock valuation models are tools investors use to estimate a stock’s true worth. They analyze factors like a company’s future earnings, growth potential, and financial health to determine if a stock is overvalued or undervalued. Common methods include the Discounted Cash Flow (DCF) model, which projects future cash flows and discounts them to present value, and the price-to-earnings (P/E) ratio, which compares a company's stock price to its earnings. Overall, these models help investors make informed decisions about buying, holding, or selling stocks based on their estimated fair value.