Valuation
Enterprise Value vs Market Cap
Enterprise value vs market cap, explained clearly: what each measures, how to bridge from one to the other, and why EV gives a truer picture of a company's price.
Read guide → ValuationEV/EBITDA Explained: How to Use It and Its Limits
EV/EBITDA compares a company's whole enterprise value to its operating cash earnings. Learn how to calculate it, read it sensibly, and where it quietly misleads.
Read guide → ValuationEarnings Yield Explained
Earnings yield is the P/E ratio flipped upside down, expressing a company's profit as a percentage of its price. Learn how to use it to compare stocks and bonds.
Read guide → ValuationHow to Calculate the Discount Rate (WACC)
WACC explained in plain English: how to calculate the weighted average cost of capital, what each input means, and why a simple hurdle rate often beats it.
Read guide → ValuationHow to Value a Dividend Stock
How to value a dividend stock: the dividend discount model, yield and payout ratio, dividend safety, and why total shareholder return matters more than yield.
Read guide → ValuationHow to Value a Growth Stock
Valuing a growth stock means paying today for profits that mostly lie in the future. Learn a disciplined method that respects growth without overpaying for it.
Read guide → ValuationNormalised Earnings: Valuing Cyclical Companies
Learn how normalised earnings smooth out the boom-and-bust of cyclical companies so you can value them through the cycle instead of at the peak or trough.
Read guide → ValuationOwner Earnings Explained (Buffett's Preferred Metric)
Owner earnings is Warren Buffett's measure of the real cash a business produces for its owners. Learn the formula, why it beats reported profit, and how to use it.
Read guide → ValuationPEG Ratio Explained: Valuing Growth Stocks
The PEG ratio divides a stock's P/E by its earnings growth rate to judge whether a fast-growing company is fairly priced. Learn how to use it and where it breaks.
Read guide → ValuationPrice-to-Sales Ratio Explained
The price-to-sales ratio values a company against its revenue, useful when profits are thin or absent. Learn how to calculate it, when it helps, and its traps.
Read guide → ValuationReverse DCF: What the Price Is Telling You
A reverse DCF flips valuation on its head: instead of forecasting growth, it reveals the growth a share price already assumes. Learn how to use it to spot optimism.
Read guide → ValuationSum-of-the-Parts Valuation Explained
Learn how sum-of-the-parts valuation values each division of a company separately, reveals hidden value in conglomerates, and where the method can mislead you.
Read guide → ValuationTerminal Value in a DCF Explained
Terminal value often makes up most of a DCF valuation. Learn the perpetuity growth and exit multiple methods, and how to keep this fragile number honest.
Read guide → ValuationThe Dividend Discount Model Explained
The dividend discount model values a stock as the present value of its future dividends. Learn the Gordon Growth formula, how to use it, and where it falls short.
Read guide → ValuationThe Rule of 40 for Software Companies
The Rule of 40 explained: how to balance revenue growth and profit margin when judging a software company, how to calculate it, and where the rule breaks down.
Read guide → ValuationPEG Ratio Explained: Growth, Price and Their Limits
The PEG ratio is a stock's price-to-earnings ratio divided by its expected annual earnings growth rate, so a P/E of 20 with 20% growth gives a PEG of 1.0.
Read guide → ValuationFCF Yield Calculator: Is This Stock Cheap?
Free cash flow yield is the quickest honest test of whether a stock is cheap. It tells you how much cash the business produces for every dollar you pay for…
Read guide → ValuationDCF Calculator: Estimate a Stock's Intrinsic Value
A discounted cash flow model answers one question: what are the cash flows this business will produce worth to me today?
Read guide → Valuation7 Valuation Mistakes Beginners Make (and How to Avoid Them)
Five common valuation errors that trap beginner investors: P/E blindness, ignoring debt, not adjusting for one-offs, anchoring to historical prices, and…
Read guide → ValuationWhen Is a Stock Cheap? How to Tell Undervalued From Overvalued
Three straightforward ways to determine if a stock is genuinely cheap: discount to intrinsic value, historical valuation range, and peer comparison.
Read guide → ValuationPrice to Free Cash Flow and FCF Yield: The Metric That Matters Most
Discover why price-to-free-cash-flow is a powerful metric for identifying great investments.
Read guide → ValuationPrice to Book Ratio Explained: When Book Value Signals Real Value
Understand price-to-book value and how to use it to spot undervalued companies.
Read guide → ValuationP/E Ratio Explained: What It Means and How to Use It Well
Master the P/E ratio to find undervalued stocks and compare companies across industries.
Read guide → ValuationMargin of Safety Explained: Graham's Rule for Not Losing Money
Benjamin Graham's most important principle: only buy when you have a genuine margin of safety—when price is meaningfully below your estimate of intrinsic…
Read guide → ValuationOverpaying for Stocks: The Largest Avoidable Risk to Your Wallet
Overpaying for stocks is the most common and most costly investing mistake. See the historical proof—and learn exactly how price paid determines every…
Read guide → ValuationWhat Is Discounted Cash Flow (DCF)? A Worked Example, Step by Step
Understand how DCF valuation converts future cash flows into today's value. Learn why time value of money changes everything in stock valuation.
Read guide → ValuationWhat Is Stock Valuation? How to Value a Stock (Beginner's Guide)
Stock valuation is determining what a business is actually worth—not what the market says it costs. Learn why this distinction transforms investment returns.
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