CluenexGlossary · Valuation
Fair value
Our estimate of what one share is worth, based on the cash the business can produce.
Why it matters
Price is what you pay; value is what you get. Buying below fair value gives you a cushion if things go a little wrong.
How to read it
We publish a base case (the fair value), a cautious case and an optimistic case, so you see a range instead of one magic number.
Also called: intrinsic value
Related
Cautious, base and optimistic casesThree fair values built from three sets of assumptions about growth and margins.Buy price (margin of safety)The fair value minus a safety margin. Below this price we call a stock undervalued.Discounted cash flowValuing a business by adding up the cash it should produce in future, shrunk back to today’s dollars.Price verdictOur one word read on price: below fair value, within the fair range, above it, or speculative.
In the Cluenex app, this explanation opens next to every fair value figure, with the live reading for the stock you are looking at. Open it in Cluenex