Valuation

The analytical process of determining the current worth of an asset, company, or financial instrument using various methodologies such as discounted cash flow analysis, comparable company analysis, or asset-based approaches. Valuation is fundamental to investment decision-making, as it helps traders and investors assess whether a security is overpriced, underpriced, or fairly valued relative to its intrinsic value. Market prices can deviate significantly from calculated valuations for extended periods due to sentiment, momentum, and behavioural factors.