Valuation

Valuation is the process of estimating the intrinsic value of a company or an asset. In Equity Research, valuation is used to determine the fair value of a company’s stock. The purpose of valuation is to estimate the worth of a company based on its financial and operational performance, industry outlook, and other relevant factors.

Valuation is an essential part of Equity Research because it helps investors make informed investment decisions by comparing a company’s stock price with its intrinsic value. A stock that is trading at a discount to its intrinsic value is considered undervalued and may present a good investment opportunity, while a stock that is trading at a premium to its intrinsic value may be overvalued and may present a potential risk to investors. There are various methods of valuation used in Equity Research, including discounted cash flow (DCF), price-to-earnings ratio (P/E), price-to-book ratio (P/B), and enterprise value-to-EBITDA ratio (EV/EBITDA), among others. These methods take into account different financial and non-financial factors, such as growth prospects, competition, management quality, and economic conditions, to arrive at a fair value of the company’s stock.

Valuation

• Concept of valuation
• Models of valuation
• Modelling
• Adjustments to Valuations
• Preparing Research Reports

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