valuation of stocks

Valuation of stocks refers to the process of determining the worth of a company's shares. Investors assess a stock’s value by analyzing financial metrics like earnings, sales, and growth potential, often using methods such as the price-to-earnings (P/E) ratio or discounted cash flow (DCF) analysis. Factors such as market conditions, industry performance, and overall economic trends also play a significant role. Ultimately, accurate stock valuation helps investors decide whether a stock is overvalued, undervalued, or fairly priced, guiding their investment decisions.