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A direct answer for every term, no unnecessary scrolling โ what it is, how it's calculated, and where it shows up in the StockIQ score. Looking for a deeper explanation with examples? Visit the Learning Center.
The P/E ratio (Price to Earnings) is the stock price divided by annual earnings per share (EPS) โ a number showing how many years of current profit investors are willing to pay for the stock at today's price.
RSI is a technical oscillator ranging from 0 to 100 that measures the speed and magnitude of a stock's recent price changes โ a value above 70 is considered 'overbought', below 30 is considered 'oversold'.
MACD (Moving Average Convergence Divergence) is a momentum indicator that compares two exponential moving averages (12 and 26 days) to identify shifts in direction earlier than regular averages.
ROIC (Return on Invested Capital) measures how much operating profit a company generates relative to every dollar invested in it (equity plus debt) โ a measure of how efficiently management runs the capital, not just how big the profit is.
DCF (Discounted Cash Flow) is a pricing model that values a stock as the sum of all the company's future free cash flows, discounted back to today's value.
The PEG ratio is the P/E ratio divided by the expected earnings growth rate (as a percentage) โ it tries to answer the question plain P/E ignores: is the multiple high because the stock is expensive, or simply because it's growing fast?
Beta measures a stock's volatility relative to the overall market โ a beta of 1 means the stock has moved roughly in line with the market, above 1 means more volatile than the market, below 1 means less volatile.
EPS (Earnings Per Share) is a company's net income divided by its share count โ the number that turns a company's total profit into a figure comparable on a per-share basis, and the one nearly every pricing multiple is built on.
Free cash flow (FCF) is the money that actually remains in a company's coffers after all operating expenses and the capital investments required to keep the business running โ not paper profit, but real, available cash.
A serious stock analysis combines at least three different angles โ financial health (fundamentals), pricing (fair value), and timing (technicals) โ because no single angle gives a complete picture on its own.
Finding undervalued stocks requires combining several different pricing methods (P/E versus the sector, DCF, net asset value comparison) โ not relying on a single metric, since any one method alone can mislead.
A growth stock is identified first and foremost by a revenue and earnings growth rate that's risen consistently across several reporting periods โ not by the size of current profit, but by the trend.
Stock returns come from a combination of price appreciation (capital gains) and sometimes dividends โ there's no reliable way to know in advance which specific stocks will rise, but there are time-tested principles that improve the odds.