foxex: What is 'Intrinsic Value'?

Sunday, September 29, 2019

What is 'Intrinsic Value'?

Intrinsic value is the perceived or calculated value of an asset, an investment, or a company. The term finds use in fundamental analysis to estimate the value of a company and its cash flows. Another use of intrinsic value is in the amount of profit that exists in an options contract.

Related to "Intrinsic Value"

What Is the Intrinsic Value of a Stock?

Intrinsic value reduces the subjective perception of a stock's value by analyzing its fundamentals.

Valuing a Company Using the Residual Income Method

Learn the underlying basics behind the residual income method and how it can be used to place an absolute value on a firm.

How Is a Company's Share Price Determined?

Share prices are driven by supply and demand and other market forces, but there are quantitative techniques used to predict or set a value on stocks.

Related Definitions

Fundamental Analysis

Fundamental analysis is a method of measuring a stock's intrinsic value. Analysts who follow this method seek out companies priced below their real worth.

Financial Statement Analysis

Financial statement analysis is the process of analyzing a company's financial statements for decision-making purposes.

Discounted Cash Flow (DCF)

Discounted cash flow (DCF) is a valuation method used to estimate the attractiveness of an investment opportunity.

Weighted Average Cost of Capital – WACC

The weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.