Fundamental Analysis

Long-term investors often look at various valuation metrics when deciding whether to invest in a particular company. One helpful metric to evaluate is market capitalization or market cap. Market capitalization is a measure of the total value of a company’s outstanding shares of stock. It is calculated by multiplying the current market price of one …

EBITDA stands for earnings before interest, taxes, depreciation and amortization. It’s a financial metric commonly used to evaluate a company’s financial performance and its ability to generate cash flow. This post will cover EBITDA in detail, including what it tells you, when to use it to evaluate businesses, and its limitations.  What is EBITDA? EBITDA …

Free cash flow, or FCF, is the cash a company generates after it accounts for outflows required to maintain business operations and support capital expenditures. Many investors consider FCF a better measure of profitability than net income or earnings, as it excludes non-cash expenses and accounts for capital spending and changes in net working capital …

A price target is a stock’s estimated future price, and it’s typically based on a company’s projected earnings, historical earnings, and economic conditions. Wall Street equity research analysts typically provide stock price targets for the public companies that they cover. They also offer buy, sell, or hold recommendations. While there’s no guarantee a stock will …

Earnings Per Share (EPS) is a financial ratio investors use to evaluate a company’s profitability. It represents the portion of a company’s net earnings allocated to each outstanding share of common stock. By examining EPS, you gain valuable insights into a company’s ability to generate and distribute profits to its shareholders. This article will cover …

Some businesses invest their shareholders’ capital wisely, turning every dollar into significantly more profit. These companies create long-term value and drive strong stock performance for investors. But other companies waste capital through unprofitable expansion or poor decisions. These companies see poor returns, weak profitability, and they’ll ultimately see poor stock performance over the long term. …