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Trading glossary

What is Undervalued?

Fundamental AnalysisBeginner

A stock is considered undervalued when its current price is below its estimated intrinsic or fair value. Value investors specifically seek undervalued stocks, believing the market will eventually recognise the true worth. Metrics like P/E ratio, price-to-book and DCF help identify undervaluation.

Related terms: Overvalued Intrinsic Value Value Stock P/E Ratio

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