Valuation Terms
Valuation
The process of judging what a company, stock, or asset may be worth.
Also called: business valuation, stock valuation
What it means
Valuation is the process of estimating how much a business or investment is worth using prices, financial results, assets, cash flows, growth expectations, or comparisons to similar companies. Different methods can produce different answers.
Why it matters
A good company can still be a weak investment if the price already assumes too much success.