Intrinsic Value

Intrinsic Value – Intrinsic value refers to the true or fundamental worth of an asset, such as a stock, bond, or business, determined through detailed financial analysis rather than its current market price. It takes into account future cash flows, growth potential, risk factors, and other relevant financial metrics to provide a realistic estimate of value. Investors use intrinsic value to decide whether an asset is overvalued, undervalued, or fairly priced, guiding informed investment decisions. Example: If a company’s discounted future cash flows indicate a value of ₹1,200 per share, but the stock is trading at ₹1,000, the intrinsic value suggests the stock is undervalued, potentially signaling a buying opportunity