How to calculate the intrinsic value of a stock

How to calculate the intrinsic value of a stock According to experts, stock valuation has formulas you can use, but they should not be treated as fixed numbers. Valuation should be flexible and consider multiple viewpoints. I am an F0 investor. At present, I want to know how to calculate the intrinsic value of a company as well as the intrinsic value of its stock. From this, when investing, I won’t be overwhelmed by emotions and end up buying at the top or paying too much. Thank you, expert! Expert consultant: Many beginner investors often search for a“real value” of a business to avoid buying a stock too expensively. However, in reality, a company’s value is not a fixed number. There are many different valuation methods, and each approach yields a different result. Therefore, valuation often helps investors outline a reasonable price range rather than pinpointing a single absolute figure. Moreover, the value of a business reflected in its stock price comes not only from financial statements or past data. A stock’s price is also influenced by growth expectations, the macroeconomic context, macro risks, and market sentiment at different stages. There are times when earnings do not change much, yet the stock price rises or falls sharply simply because investor expectations shift. For new investors, it may be helpful to start with simple valuation methods such as comparing P/E (price-to-earnings) and P/B (price-to-book) of the company with the industry average or with the company’s own past. Reading brokerage research reports can also provide additional perspectives. These reports are often written for individual investors, so they are relatively accessible and help quickly form a sense of a reasonable valuation. However, note that valuations are only indicative. All valuation models rely on assumptions about the future, such as growth rate, profit margins, or interest rates. These factors can change, so valuation is not an absolute right-or-wrong figure; it is a tool to assess whether a stock is relatively cheap or expensive. To avoid emotional interference, the more important focus is capital and risk management. Even when valuation is correct, there are cases where stock prices fall due to overall market movements or cash-flow psychology. In such cases, reasonable allocation, portfolio diversification, and predefined exit targets and cut-loss points can help investors maintain discipline. The greatest risk is not mispricing but buying a stock without a plan for when to buy, how to allocate capital, and when to sell. Expert: Tran Duc Trung, Director of Asset Management, Fidt Joint Stock Company