Fundamental Analysis

Fundamental analysis evaluates a security's intrinsic value by studying the underlying business: financial statements, revenue and earnings trends, competitive position, management quality, and the broader industry and economy it operates in. The goal is to estimate what a company is actually worth, independent of its current stock price.

It stands in contrast to technical analysis, which studies price and volume patterns rather than the business itself. Many investors combine the two: using fundamental analysis to decide what to buy, and technical analysis to help decide when to buy or sell it.