How to read your analysis

The headline. The calculator runs four ways of valuing the company, blends the ones that could run into one estimate of what the stock is worth, per share, and compares today's price with it. Price below the estimate is undervalued, close to it is fair value, above it is overvalued. The percentage is how far the price sits from the estimate.

What to look for: "undervalued" is not "buy", and "overvalued" is not "sell". It's one estimate, and a cheap stock is often cheap for a good reason. Treat it as a question to start with, not an answer. If the result is marked unverified, two of the numbers behind it didn't agree, so lean on it less (see Did the numbers agree?).

Two halves of the story together. The verdict says whether the stock looks cheap or pricey for what the business is worth. The price side says what the stock has actually been doing: its trend over about a year, and where it sits between its 52-week low and high. The line tells you whether the two agree or disagree.

What to look for: green "agree" means the value case and the price movement point the same way. Amber "disagree" is the interesting one: cheap but still falling (a bargain nobody has noticed, or cheap for a reason?), or expensive but still rising. It's context for your own research, not a signal. The price side is a simple trend read, not a full chart analysis.

How it's worked out, no black box: the price read uses only the price history. Trend: the most recent three months of weekly closing prices are averaged against the earliest three months of the past year. More than 5% higher is "trending up", more than 5% lower is "trending down", anything in between is "sideways". Position: where today's price sits in its 52-week range: the top fifth is "near its highs", the bottom fifth "near its lows", the rest "in the middle". That gets paired with the verdict. On purpose simple: no indicators, no averages, no chart image.

The four methods give different answers, so the calculator blends the ones that could run into one number, the fair value, giving the cash-flow methods the most say. Then it draws a range 10% either side of it. Valuing a company is never exact, and the range is the estimate saying so: it's a zone, not one "correct" price.

What to look for: the page also shows where the individual methods landed. If they're close together, they agree, and the answer is sturdier. If they're far apart (and they sometimes are), the answer depends a lot on the growth assumed. Read how the verdict is built to see why. When only one method could run, you get one number and no range, because a range from one method would be pretending to a precision it doesn't have.

The average price target from professional analysts, shown next to the estimate. Not because they're always right, but so you can see when the estimate disagrees with them.

What to look for: if the two are close, that's reassuring. A big gap is worth a look: either the analysts know something the four methods don't, or the other way round. A gap of two or three times usually means one number is being pulled by a single input, so don't lean hard on either.

The raw ingredients: the share price, the spare cash the company brings in, its debt and cash, the share count, profit per share, book value, and the growth assumed. Each one shows where it came from and when it was pulled.

What to look for: this is the "show your work" layer. When a verdict surprises you, the numbers usually explain it (a big growth assumption pushes the fair value up, for example). A number marked "didn't match another number pulled" is one that failed a check, see Did the numbers agree?. Pro can change any of these and rerun.

Context around the verdict, in two groups. What you pay for it is a set of quick ratios investors use to compare the price with the company's profit, sales or assets. How well it earns answers a different question: not "is it cheap?" but "is it a good business?"

What to look for: a stock can be cheap and a poor business, or expensive and an excellent one. The two groups help you tell which. The colors are rough rules of thumb only: green looks favorable, amber is typical, red is worth a closer look.

How many years of the company's profit you're paying for at today's price. A P/E of 20 means the price is 20 times one year's profit per share. "Last year" uses the profit from the last twelve months; "next year" uses the profit analysts expect.

Rough guide: under about 15 is often read as cheap (or as a company the market expects to shrink); 15 to 25 is around the market average; 30 and up means a lot of growth is already in the price. But context rules: a fast grower deserves a higher number, which is what price to growth allows for. If "next year" is much lower than "last year", profit is expected to jump.

The price-to-profit number divided by how fast profit is growing, in percent a year. It answers "is this price reasonable given how fast the company is growing?"

Rough guide: around 1 or below is often read as "fairly priced for its growth". Well above 2 can mean you're paying a lot even after allowing for growth. One of the better single checks on a scary-looking price-to-profit number.

How many years of the company's sales you're paying for. Useful when a company has little or no profit yet, as many young or fast-growing companies do, because it doesn't need a profit to work.

What to look for: low single digits is common for established businesses. Ten and up means the market is paying for a lot of future growth. Only compare it within one industry: software companies and grocery chains live in completely different ranges.

The price compared with the company's book value: what it owns minus what it owes, per share. The classic value investor's ratio, and most meaningful for businesses that own a lot of physical assets, banks included.

What to look for: under 1 means the market values the company at less than its own net worth on paper. That's either a classic bargain sign or a warning. For software and brand companies the number is often huge and doesn't mean much, because their value isn't in things they own.

Company value here means the whole company's price tag: the value of all its shares, plus its debt, minus its cash. Comparing that with its operating profit (before accounting charges like depreciation) or with its sales gives a number that doesn't change depending on how much the company borrows, which is why professionals use it to compare companies.

What to look for: lower is cheaper. Company value at 8 to 12 times operating profit is common for established firms; 20 and up means high growth is expected. Best used to compare companies in the same industry.

Dividend yield is the yearly dividend as a share of the price: the income you collect just for holding the stock. Share of profit paid out is how much of the company's profit goes out as dividends.

What to look for: a very high yield (say 8% and up) can be a warning that the market expects the dividend to be cut. A payout under about 60% of profit usually leaves room; over 100% means the company is paying out more than it earns, which rarely lasts.

For every $100 put into the business, from lenders and owners together, how many dollars of profit it earns in a year. That sits beside what the company's money costs it to raise. If it earns more than its money costs, the business is creating value. If it earns less, it's losing value even while it looks "profitable" on paper.

Rough guide: steadily above 10 to 15%, and above what its money costs, is the mark of a genuinely good business. This is often the single best "is this a quality company?" number. It shows "not available" when the accounting figures would distort it rather than print something misleading. The figure is an estimate, assuming a 21% tax rate.

ROE is profit as a share of what the owners have in the business. ROA is profit as a share of everything the company owns. Both measure how well the company turns what it has into profit.

What to look for: higher is better, but ROE can be made to look high by heavy borrowing or by buying back shares, which is exactly why what it earns on its money is shown next to it. Read them together, not alone.

Of each dollar of sales, what's left at three stages: after the direct cost of making or delivering the product (gross margin), after the everyday costs of running the business (operating margin), and as final profit after everything, tax included (net margin).

What to look for: higher, and steady or rising, means the company can hold its prices and its costs are under control. Compare only within one industry: a software company keeps far more of each sale than a supermarket does, by nature.

Small bar charts of the recent quarters (switch to years for the long view): free cash flow, sales, operating profit, profit, profit per share, the three margins, the share count, and debt against cash. Green bars are positive, red bars negative, the dashed line is zero.

What to look for: the shape, not any single bar. One number can mislead: a company can bring in plenty of cash over a year while its latest quarter went the other way (heavy spending, a one-off cost). The chart catches that, and when the year and the latest quarter disagree, a note above the charts says so. Two often-overlooked ones: a falling share count means the company is buying back shares, so your slice grows; a rising one means it's issuing more, so your slice shrinks. Debt against cash shows whether the company is leaning harder on borrowing. One odd bar is a question to look into, not a verdict. The valuation itself uses the full-year figure, so one unusual quarter never swings the fair value. Depth is the last four to five years and the recent quarters, which is what the data sources provide.

The section that reads the three tables above for you: the numbers behind the estimate, the Financials ratios and the History charts, turned into answers. Is it growing? Does it make money? Does it bring in cash? Can it pay its bills? Is it earning its keep? Is your slice shrinking? What do you pay for it? Does it pay you to wait? What does Wall Street think? Then the bottom line, and what to watch at the next report. Every sentence is built from the figures on the same page, so the words can never disagree with the numbers.

What to look for: the colored dot beside each answer. Green is a strength, amber is normal or worth a look, red is a worry. Read the bottom line last: it puts the strengths and the worries next to the price, which is the combination that matters. A cheap stock with real worries can be fairly priced; a strong business at a high price has less room for a stumble. None of it is a recommendation. It is what a careful reader would want to know before deciding anything, and the what to watch list is what to check when the next earnings report lands.

Before anything gets valued, a few numbers are pulled two different ways to see whether they match: the price from the main source against a second, independent source (they have to be within 5%); the company's reported sales against sales per share times the share count; and the price against the stock's own 52-week range. Anything that doesn't agree is shown, not hidden.

What to look for: all agree means you can lean on the number. If the result is marked unverified, one pair didn't agree, so the headline percentage is left off and the verdict is marked provisional. You can still save it to your watchlist; just know what it rests on. "A confident number built on bad data is worse than no number" is the founding rule here.

Think one of the numbers is off, or want to test a what-if? Change any of the main inputs (the share price, the share count, cash flow, debt, profit per share, and so on) and every method reruns with your numbers, labeled "user-adjusted".

What to look for: a great way to learn. Nudge the growth up and watch the fair value move, and you'll see how much the verdict depends on that one assumption.

Six steps, start to finish. None of it is a secret, and none of it is a prediction. It's arithmetic on public numbers, plus one honest assumption.

1. Start with the facts. The price, the spare cash the business brings in after paying its bills (free cash flow), profit per share, book value, sales per share, debt, cash, the share count, and how much the stock swings compared with the market (beta). These come from a market-data feed. No judgment yet: these are the figures the company reports.

2. Then a guess at how fast it might grow. This is the one soft input. A language model reads the company's history and the analysts' forecasts and proposes growth rates for the years ahead. The calculator's own code then caps them, whatever comes back, because the quickest way to make any stock look cheap is to assume heroic growth forever.

3. Then what a fair return would be. Money in the future is worth less than money today, so future cash has to be marked down. The rate it's marked down at rises with the stock's beta: a jumpier stock has to promise more to be worth the same. That's the discount rate.

4. Four methods, and only the ones that fit. Each answers "what is a share worth?" a different way, and each suits a different kind of company:

• Cash flow, 20 years (the biggest say in the blend, 40%). Projects the spare cash the company brings in for twenty years, adds a value for everything after that, counts it all in today's dollars, then adds the company's cash and subtracts its debt. The heaviest method and the most demanding: it needs a business that reliably brings in cash.
• Cash flow, 10 years (20%). The same idea over ten years, with one average growth rate. A check on its longer sibling, and on purpose less optimistic.
• Profit per share, 10 years (15%). Projects profit per share instead of cash, for ten years, adding nothing for the years after. The most cautious of the four: it asks what a decade of profit alone is worth.
• Sales growth (10%). Values the company on its sales and how fast they're growing, rather than on profit. For fast-growing businesses that aren't profitable yet, where the cash-flow methods can't run.
• Book value. Compares today's price with what the company owns minus what it owes, against where that ratio has sat over the years. Built for banks and asset-heavy businesses. Not running yet: it needs several years of price-to-book history, and the data source only provides today's. It's left out of the blend entirely, not counted as zero.

When a method can't run (the company is losing money, or burning cash, or a number is missing), the page says so, and the methods that did run share its weight. A number is never guessed for it.

Why some stocks run all four, and some run one. The two cash-flow methods need the exact same thing: a business that's genuinely bringing in cash. So they almost always run together or fail together, and in practice it's really three independent hurdles, not four. A steady, profitable company clears all three: cash coming in, real profit, and growing sales, landing on 4 of 4. A profitable company whose sales have gone flat or are shrinking loses only sales growth, landing on 3. A company that's profitable and growing but still spends more cash than it brings in (often one investing heavily to grow) loses the cash-flow pair, landing on 2. And a young, fast-growing company that's still losing money and burning cash loses everything except sales growth (the one method that doesn't need profit at all, only sales that are climbing), landing on 1. Lose sales growth too (shrinking sales, or no sales-per-share figure) and nothing is left to value it on; the page says so rather than force out a number. Whenever fewer than four ran, the page states the company-specific reason right next to the fair value, not just a row of grey "didn't run" cells to interpret on your own.

5. Blend them into one number. The methods that ran are weighted and averaged. That's the fair value. The range around it is the honest admission that an answer to the cent would be false precision.

6. Compare the price with it. Clearly below the range reads undervalued, clearly above reads overvalued, and inside it reads fair value, because at that point the gap is smaller than the estimate's own margin for error.

What to look for: how far apart the methods landed tells you how much to trust the verdict. Close together, and the answer is solid. Far apart, and the "right" answer depends heavily on the growth assumed, which is your cue to read the growth it assumes and the "what would change the picture" line before believing the headline.

The thing worth remembering: every verdict rests on step 2. Steps 1 and 3 to 6 are arithmetic that gives the same answer every time. Change the growth assumption and the verdict can change with it, which is exactly why the page shows you the growth used and the growth at which the verdict would flip. Full formulas are on the methodology page.

The cash a company has left after paying to run and maintain the business: the money genuinely available to pay down debt, buy back shares or pay dividends. It's what the two cash-flow methods are built on.

What to look for: positive and growing means a healthy business that funds itself. Negative year after year means the company depends on outside money to keep going, and the cash-flow methods can't run on it.

What the company owes, and what it holds. Both are used to get from what the whole company is worth to what one share is worth: add the cash, subtract the debt.

What to look for: debt only worries when it's large compared with the cash coming in. A profitable company with plenty of cash can carry a lot of debt comfortably. The raw figure alone isn't good or bad, which is why it isn't colored.

Profit per share (what Wall Street calls EPS) is the company's profit divided by its share count. Book value per share is what it owns minus what it owes, per share. Sales per share is its sales divided by the share count. Each one feeds a different method.

What to look for: these are building blocks, not verdicts. They become meaningful as ratios against the price, which you'll find colored in Financials.

How much a stock tends to swing compared with the market as a whole. A beta of 1 moves with the market; above 1 swings more; below 1 is steadier. It sets the discount rate.

What to look for: it's about risk, not good or bad. A high beta just means bigger swings, in both directions. It's held between 0.8 and 1.6 for the discount rate, so an unusually calm or unusually wild stock can't push the rate somewhere silly.

The yearly rate used to turn future cash into today's dollars. Think of it as the return you'd want for taking on the risk. More risk means a higher rate, and a higher rate means a lower fair value.

What to look for: it's an assumption, not a fact. It's built from a safe baseline rate plus extra for the stock's beta, which puts US stocks between about 5.8% and 8%. A higher rate is more cautious, not "bad": it just means the estimate asks for more before calling something cheap.

The heart of any valuation: how fast the company's cash, profit and sales are assumed to grow. The calculator starts from the company's own history and analysts' forecasts, and caps the numbers so they stay realistic.

What to look for, and it's the counter-intuitive one: these are assumptions, and a higher growth number pushes the fair value up. So a rosy growth rate makes a stock look cheaper than it is; it isn't "good news". That's why they're capped and shown. Pro can change the growth and watch how much the verdict moves.

ReadR's read on the direction the chart is leaning right now: up, down, or neither, based on the trend, the shape of the highs and lows, and how strong the recent moves look. Traders call an upward lean bullish and a downward one bearish.

What to look for: it's a description of the picture, not a prediction. "Leans up" means the chart is trending and shaped upward at the moment, and that can change. The "Why it leans that way" section tells you how much of the chart agrees with the lean, and which price would undo it.

A floor (what traders call support) is a price where buyers have stepped in before, so the price has stopped falling there. A ceiling (resistance) is a price where sellers have stepped in before, so the price has stopped rising there.

What to look for: these are zones, not exact lines. They matter because lots of people watch them, so the price often pauses or turns around there, until it breaks through clearly.

The pattern of the highs and lows. Each high higher than the last, and each dip shallower than the last, is an uptrend. Each high lower and each dip deeper is a downtrend. Neither is a sideways range.

What to look for: the first dip that goes deeper than the last one, after a run of shallower dips, is how traders spot that a trend may be changing. They call it a "break of structure".

Each candle on a chart shows where the price opened, closed, and how high and low it went in one period. Certain shapes have names (doji, engulfing, hammer, and so on), and traders read them as hints that the mood is shifting.

What to look for: one candle on its own is a weak hint. They matter most when they show up at a floor or ceiling, or with a lot of trading behind them.

Volume is how many shares were traded in each period. It's the effort behind a price move. A big move on heavy trading is convincing; a big move on light trading is suspect.

What to look for: a rising price on rising volume means real conviction behind it. A move on thin volume, or a huge burst of trading that goes nowhere, often means the move is running out of steam. ReadR points out these "lots of effort, little result" mismatches.

A popular modern vocabulary for the same chart ideas, often called ICT after the trading course that spread it. A liquidity sweep is a quick dip below an obvious low that snaps back (it catches people who sold there). An order block is a zone where big buyers or sellers stepped in before. A fair value gap is a stretch the price jumped over so fast that little trading happened there. Much of it is a new name for an older idea, so ReadR gives both.

What to look for: treat these as descriptions of areas on the chart, not proof of what big institutions are doing. Nobody can prove that from a screenshot. On purpose left out: time-of-day setups and "best entry" zones. Those are trade signals, not chart observations, and ReadR never signals entries.

The section that reads every part of the analysis for you and turns it into answers. Which way is it heading? Where are the walls (the floors and ceilings)? What shape is it making? What do the indicators, the candles and the volume say? Where did the big money step in? Is there a trap? What can't this screenshot tell you? Then the bottom line, and what to watch next. Every sentence is built from the read on the same page, so the words can never disagree with the sections above it.

What to look for: the colored dot beside each answer. Green means that part of the chart agrees with the bias, amber means it's mixed or the screenshot limits what can be seen, red means it goes the other way. Read the bottom line last: it says how many of the readable signals agree, whether volume backs the move, and the one price the read depends on. A read that most of the chart agrees with and volume backs is well supported; one carried by a single signal is thin, and the bottom line says which. None of it is a recommendation. It describes the chart; what to do is yours.

Add up to three charts of the same stock at different zoom levels (say daily, 4-hour and 1-hour) and ReadR tells you whether they agree or disagree. The first chart is treated as the main one.

What to look for: when the zoomed-out and zoomed-in views agree, the picture is stronger. When they disagree (up on one, down on another), that's a reason to be cautious rather than confident.

ReadR tells you when the screenshot itself limits what it can see: no volume bars, no timeframe label, low resolution, a cut-off price axis, and so on.

What to look for: this is the honesty layer for charts. A clearer screenshot (the timeframe visible, volume bars showing, candles readable) gets you a better read.