Investing Glossary — Quick, Clear Definitions
A direct answer for every term, no unnecessary scrolling — 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.
P/E Ratio — What It Is and How to Use It
The P/E ratio (Price to Earnings) is the stock price divided by annual earnings per share (EPS) — a number showing how many years of current profit investors are willing to pay for the stock at today's price.
RSI (Relative Strength Index) — What It Is and How to Read It
RSI is a technical oscillator ranging from 0 to 100 that measures the speed and magnitude of a stock's recent price changes — a value above 70 is considered 'overbought', below 30 is considered 'oversold'.
MACD — What It Is and How to Read the Chart
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) — What It Is and Why It Matters
ROIC (Return on Invested Capital) measures how much operating profit a company generates relative to every dollar invested in it (equity plus debt) — a measure of how efficiently management runs the capital, not just how big the profit is.
DCF (Discounted Cash Flow) — A Quick Definition
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.
PEG Ratio — What It Is and How It Fixes P/E
The PEG ratio is the P/E ratio divided by the expected earnings growth rate (as a percentage) — 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 — What It Is and How It Measures Risk
Beta measures a stock's volatility relative to the overall market — 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) — What It Is and How to Read It
EPS (Earnings Per Share) is a company's net income divided by its share count — 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) — What It Is and Why It Matters More Than Accounting Profit
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 — not paper profit, but real, available cash.
How to Analyze a Stock — A Practical Quick Guide
A serious stock analysis combines at least three different angles — financial health (fundamentals), pricing (fair value), and timing (technicals) — because no single angle gives a complete picture on its own.
How to Find Undervalued Stocks — A Practical Guide
Finding undervalued stocks requires combining several different pricing methods (P/E versus the sector, DCF, net asset value comparison) — not relying on a single metric, since any one method alone can mislead.
How to Find Growth Stocks — A Practical Guide
A growth stock is identified first and foremost by a revenue and earnings growth rate that's risen consistently across several reporting periods — not by the size of current profit, but by the trend.