💡Intrinsic value = a company’s true, inherent value based on its financial health

While a company’s stock has a certain price that investors can buy or sell it for on the stock market (its stock price)…

Its intrinsic value may or may not match its stock price – sometimes they can be worlds apart! 🌎

Let’s take a real-world example.

Say your friend gives you a box of peaches 🍑

Each peach has a different size, freshness, sweetness, and nutritional value.

If there’s a bad peach, you can tell by examining it – maybe it’s sour, old, or bruised 😔

These traits are like a stock’s fundamentals, and make up the stock – or the peach’s – intrinsic value, or REAL value

But customers may have different opinions about which peaches are better, and how much they’re willing to pay for them 💰

Maybe this year sour peaches are the new “thing”, so they’re willing to pay more for your sour ones 🤢

So, a peach’s price changes based on the season or trends. . . 🍑

The same is true for stocks, which change based on market conditions and investor hype.💼

So remember: a stock’s price is what people are willing to pay for it, but its intrinsic value is what it’s REALLY worth