Valuation Terms
Undervalued
A description for an asset priced below what an analyst believes its fundamentals justify.
Also called: priced too low
What it means
An asset is called undervalued when the market price appears lower than what the analyst or investor believes is supported by the business fundamentals. This is also an opinion that depends on assumptions.
Why it matters
It helps users understand why two investors can look at the same company and reach different conclusions about attractiveness.