Fundamental Analysis & Valuation
4 terms
Gordon Growth Model
Fundamental Analysis & Valuation
₹
A single-stage dividend discount model that values a share assuming dividends grow at a constant rate forever.
Value = Next Year's Dividend / (Required Return - Constant Growth Rate)
Gross Margin
Fundamental Analysis & Valuation
%
Gross profit as a percentage of revenue, showing what proportion of each sale survives the direct cost of producing it.
Gross Margin = (Revenue - Cost of Goods Sold) / Revenue x 100
Growth at a Reasonable Price
Fundamental Analysis & Valuation
qualitative
An approach that seeks companies growing above average while refusing to pay a multiple that assumes the growth continues indefinitely.
Test: above-market earnings growth with a PEG near or below 1 and a defensible reason for the growth to persist
Guidance
Fundamental Analysis & Valuation
qualitative
A company's own published expectation for a future financial metric, such as revenue growth or margin.
Test: the statement is forward-looking, quantified or bounded, and issued by the company rather than by an analyst