FactorSage

Chapter 1

Intrinsic Value

Understand what intrinsic value means, the valuation models FactorSage supports, and how to turn a valuation gap into a strategy rule.

Lessons in this chapter

  1. 1.1What is intrinsic value?

    How a valuation estimate differs from the market price and why the gap matters.

  2. 1.2DCF valuation

    Discount future cash flows back to today and see how assumptions move the answer.

  3. 1.3Owner Earnings

    A cash-focused profit measure that strips out non-cash and growth-driven distortions.

  4. 1.4Residual Income valuation

    Value a business based on the profit it earns above its cost of equity.

  5. 1.5Graham and Peter Lynch formulas

    Two simple rules-of-thumb that quickly translate growth and earnings into a price target.

  6. 1.6EPV (Earnings Power Value)

    Value a business as if its current normalised earnings continue forever, without growth.

  7. 1.7TTM vs annual fundamentals

    Choose between trailing twelve months and annual figures based on how fast you want the valuation to react.

  8. 1.8Margin of Safety

    Translate the gap between price and intrinsic value into a single percentage you can act on.

  9. 1.9Intrinsic value in strategies

    How combined intrinsic value, the buy threshold, and per-model selection work together.