... is to determine the fair (intrinsic) value of an asset and identify whether it is undervalued or overvalued by the market. Simply put, an investor uses this approach to understand whether the current price of a stock (or other security) is worth the money that is being asked for it on the market. If fundamental analysis shows that the fair price of a company is lower than the market price, then the asset is considered overvalued and its purchase is not profitable now. Conversely, if the estimated ...