Why is your valuation model showing that my stock is over/under valued by 50%?

We provide valuation model tools to allow you to easily run your own valuations, be they discounted cashflow models orGraham growth valuations.

As we explain on the models, the pre-defined values are simply a starting point based on global assumptions that we have applied across the market - any resulting valuation outputs are necessarily generic and are not endorsed for a given stock by Stockopedia.

Instead, you should amend the key assumptions (such as the discount rate or the Graham LT Growth rate) as you see fit depending on the specific circumstances of the stock. The success of a model is highly dependent on the quality of the inputs (this is known as "garbage in, garbage out"). This is all part of the DYOR nature of the site.

You can read more about the thinking behind the various models in our Library here. If you disagree with the underlying methodology of a given model, please feel to raise a support ticket, we are always happy to discuss them.

Staying Solvent....

Even with a first-class methodology and carefully chosen inputs, In any valuation exercise, it's important to recognise the complex interrelationship between the market price and intrinsic value, and the nature of value traps. As Ben Graham argued that in his testimony to the Senate Banking Committee in 1955, while it may take the market an inconveniently long time to adjust to intrinsic value, the beauty of the market is that it usually does get there eventually. Nevertheless, we should always remember that, as Keynes said, the market can sometimes stay irrational longer than you can stay solvent!