Explanation

Answer Example

To determine the intrinsic value of a stock, I primarily use DCF analysis, which involves forecasting free cash flows and discounting them back to their present value using the WACC. Additionally, I incorporate sensitivity analysis to account for variations in assumptions like growth rates or discount rates. For example, in a recent analysis of a tech company, I projected cash flows over ten years and identified a 25% undervaluation based on intrinsic value versus market price. I also cross-referenced my analysis with comparable company valuations for validation.