VALYSTR Guides
Stock research guides, from price to decision.
Five practical guides and 51 in-depth articles that follow the way good research actually happens: value the business, see what the price already expects, find candidates, write down what must stay true, and read the results when they arrive.
How to Value a Stock: A Practical Guide to Stock Valuation Methods
Learn how to value a stock with DCF and multiples, see a worked example with the formulas, and avoid the mistakes that make cheap stocks look undervalued.
Read the guide- DCF Model Example: Building a Discounted Cash Flow Valuation Step by StepA full DCF model example: forecast free cash flow, set WACC, compare two terminal value methods and bridge to value per share, with a sensitivity table.
- Dividend Discount Model: The Gordon Growth Formula, a Worked Example and When It WorksDividend discount model: the Gordon growth formula, a worked example at $23.63, the growth the price implies, a two-stage version, the total-payout variant.
- Earnings Yield: What It Is, How to Calculate It and How to Compare It With a BondEarnings yield: the inverse of the P/E, a worked example at 4.8%, the EBIT to enterprise value version, how to compare it with a bond yield, and the traps.
- Enterprise Value vs Market Cap: What Each Measures, With a Worked ExampleEnterprise value vs market cap: the formula, what goes into EV, a worked example on two companies, which multiples go with each, and the mistakes that mix them.
- EV to EBITDA: How to Calculate It, What a Good Multiple Looks Like and Where It MisleadsEV to EBITDA: the formula, a worked example at 7.4×, why acquirers use it, what a good multiple looks like, and the capex blind spot that flatters it.
- Forward P/E vs Trailing P/E: What Each One Tells YouForward P/E vs trailing P/E: how each is calculated, why they differ, a worked example, the traps in each, and which one to use for growth and cyclical stocks.
- What Is a Good P/E Ratio? How to Judge a P/E Against Growth and RiskWhat is a good P/E ratio? It depends on growth, risk and which earnings you use. See the growth a P/E implies, forward vs trailing P/E, and where PEG fails.
- How to Calculate Market Cap: The Formula, Size Bands and What They Mean for ResearchHow to calculate market cap: price times diluted shares, a worked example, the size bands from micro to mega cap, why size changes the research.
- How to Calculate the Intrinsic Value of a Stock (Three Methods)How to calculate the intrinsic value of a stock three ways: DCF, earnings power and a reverse DCF, with a worked example and the inputs that move the answer.
- Margin of Safety: What It Is, the Formula and How Much to DemandMargin of safety: the formula, a worked example with a valuation range, how large a discount to demand for different businesses, and the mistakes that erase it.
- PEG Ratio: What It Is, How to Calculate It and When It MisleadsPEG ratio: the formula, a worked example on three companies, why the rule that a PEG of 1 is fair breaks for slow and fast growers, and what to use instead.
- Price to Book Ratio: What It Measures, a Worked Example and When It WorksPrice to book ratio: the formula, a worked example at 2.3×, why ROE sets the multiple a company deserves, when P/B works and when it misleads.
- Price to Sales Ratio: What It Measures, a Worked Example and When to Use ItPrice to sales ratio: the formula, a worked example at 1.0× and 5.0×, why the multiple a company deserves depends on its margin, when P/S is the right tool.
- Stock Buybacks Explained: How They Work, When They Create Value and When They Destroy ItStock buybacks explained: how repurchases work, the per-share arithmetic on a worked example, why the price paid decides whether value is created or destroyed.
- Stock Valuation Calculator: Estimate Intrinsic Value With a DCFFree stock valuation calculator: enter free cash flow, growth, discount rate and net debt to get intrinsic value per share, upside and a sensitivity table.
- Terminal Value Formula: Perpetuity Growth vs Exit Multiple, With a Worked ExampleTerminal value formula, two ways: perpetuity growth and exit multiple on a worked example, why it dominates a DCF, how to cross-check them, and the traps.
- WACC Formula: How to Choose the Discount Rate for a DCFThe WACC formula: CAPM cost of equity, after-tax cost of debt, market-value weights, a worked example landing near 8.5%, and when a plain hurdle rate is better.
- What Is Beta in Stocks? How It Is Measured, What It Means and Where It MisleadsWhat is beta in stocks? How it is measured, what a beta of 1.1 means, how leverage raises it on a worked example, its role in the cost of equity.
Reverse DCF: How to Work Out What Is Priced Into a Stock
A reverse DCF solves for the growth rate a stock's price already implies. Learn the formula, work an example, and judge whether that bar is realistic.
Read the guide- Implied Growth Rate: How to Work Out What Growth Is Priced Into a StockCalculate a stock's implied growth rate from its P/E or with a reverse DCF, see how discount and terminal assumptions move it, and test it against history.
- Priced for Perfection: What It Means When a Stock Assumes Everything Goes RightWhat priced for perfection means, the warning signs that a stock's price assumes everything goes right, and why small misses can trigger large drops.
- Reverse DCF Calculator: What Growth Is Priced Into the Stock?Free reverse DCF calculator: enter the share price, shares, net debt, free cash flow and discount rate to solve for the growth the market has priced in.
How to Find Undervalued Stocks With a Stock Screener
How to find undervalued stocks with a screener: the value, quality and balance-sheet criteria to use, sensible thresholds, and how to avoid value traps.
Read the guide- Current Ratio Formula: Liquidity, the Quick Ratio and What a Good Number Looks LikeCurrent ratio formula and the quick ratio: a worked example at 1.8× and 1.1×, what a good number looks like, the cash conversion cycle behind it.
- Debt to Equity Ratio: How to Calculate It, What Is Normal and Why Net Debt to EBITDA Is Often BetterDebt to equity ratio: the formula, a worked example at 0.5× that jumps to 1.7× after a buyback, what counts as normal, why book equity misleads.
- Dividend Yield Formula: How to Calculate It, What It Tells You and the TrapsDividend yield formula: annual dividend over price, a worked example at 3.0%, payout and cash cover, yield plus growth as a return, and the yield trap.
- Free Cash Flow Formula: How to Calculate FCF From a 10-K, Line by LineFree cash flow formula from a 10-K: operating cash flow minus capex, a worked reconciliation from net income, the adjustments that matter, and the traps.
- Free Cash Flow Yield: What It Is, How to Calculate It and How to Screen With ItFree cash flow yield: the formula, market cap vs enterprise value versions, a worked example comparing a 6.7% and a 2.0% yield, and how to screen with it.
- Interest Coverage Ratio: How to Calculate It and How Much Cover Is EnoughInterest coverage ratio: EBIT over interest expense, a worked example at 11.7× that halves after a buyback, what counts as safe, the EBITDA and cash variants.
- Net Debt to EBITDA: How to Calculate It and How Much Debt Is Too MuchNet debt to EBITDA: the formula, a worked example at 0.9×, what counts as safe, the ratios to read beside it, and the traps in adjusted EBITDA and leases.
- Return on Equity Formula: What ROE Measures, the DuPont Breakdown and Its LimitsReturn on equity formula: net income over average equity, a worked example at 17.6%, the DuPont breakdown, ROE vs ROIC, what counts as good, and the traps.
- ROIC Calculator: Return on Invested Capital, Step by StepFree ROIC calculator: enter operating income, tax rate, debt, equity and cash to get NOPAT, invested capital, ROIC and the spread over the cost of capital.
- Value Stock Screener: A Ready-to-Use Screen With ThresholdsA ready-to-use value stock screener: exact criteria and thresholds, three variants for deep value, quality and dividends, and what to do with the results.
- Value Trap: How to Tell a Cheap Stock From a Broken OneWhat a value trap is, the six patterns behind most of them, a checklist to run before buying a cheap stock, and an illustrative case with the numbers.
- What Is ROIC? Return on Invested Capital Explained With a Worked ExampleWhat is ROIC? Learn the return on invested capital formula, two ways to measure invested capital, a worked example, ROIC vs ROE, and the pitfalls to avoid.
How to Write an Investment Thesis That Tells You When to Sell
Learn how to write an investment thesis with a fill-in template, a worked example, kill criteria and rules for when to sell a stock, not only when to buy.
Read the guide- Economic Moat: The Five Sources of Durable Advantage and How to Test for OneEconomic moat explained: the five sources of durable advantage, the ROIC test that shows whether one exists, a worked example, how moats erode.
- How to Analyze a Stock: A Seven-Step Method From Business to DecisionHow to analyze a stock in seven steps: understand the business, test its quality and balance sheet, read what the price implies, value it, write the thesis.
- How to Keep an Investment Journal That Separates Skill From LuckHow to keep an investment journal: what to record at entry, review and exit, a sample entry, review cadence and post-mortems that separate skill from luck.
- Investment Thesis Template: Copy It, Fill It In, Keep It HonestA free investment thesis template to copy and fill in, with a guide to each field, a completed example and a one-page kill criteria sheet for when to sell.
- When to Sell a Stock: Five Sell Rules to Write Before You BuyWhen to sell a stock: five sell rules tied to your thesis, valuation and position size, what not to sell on, and a decision table for trimming vs exiting.
How to Read an Earnings Report: A 10-Minute Reading Order
Learn how to read an earnings report in 10 minutes: what to check first, which line items matter, and why a stock can fall even after beating estimates.
Read the guide- Earnings Calendar: How to Use It to Prepare for Every ReportOpen a live earnings calendar, then learn to use it: before-open vs after-close timing, confirmed vs estimated dates, and a checklist to prepare for reports.
- Earnings Surprise: How to Calculate It and What It Tells YouWhat an earnings surprise is, how to calculate it (even with negative estimates), why guidance surprises often matter more, and pitfalls in consensus data.
- EBITDA Formula: How to Calculate It, a Worked Example and What It Leaves OutEBITDA formula two ways, from operating income and from net income, a worked example at $240m, what EBITDA is for, the bridge to operating cash flow.
- How to Read a 10-K: The Annual Report, Section by Section, in About an HourHow to read a 10-K in about an hour: what each section holds, the order to read them in, a worked example, the red flags, and how it differs from a 10-Q.
- How to Read a 10-Q: The Quarterly Report, Section by SectionHow to read a 10-Q: what the quarterly report contains, the order to read it in, a worked example, the red flags to check, and the year-to-date cash flow trap.
- How to Read a Balance Sheet: What Each Line Means and the Five Checks That MatterHow to read a balance sheet: what each line means, a worked example that balances, and the five checks that matter: liquidity, leverage, working capital.
- How to Read a Cash Flow Statement: Operating, Investing and Financing, With a Worked ExampleHow to read a cash flow statement: the operating, investing and financing sections on a worked example, the checks at each line, the year-to-date trap.
- How to Read an Earnings Call Transcript: What to Skip, What to StudyHow to read an earnings call transcript in twenty minutes: guidance first, then the questions, then the prepared remarks, with a worked example and the tells.
- How to Read an Income Statement: From Revenue to EPS, and What to Check at Each LineHow to read an income statement: every line from revenue to earnings per share on a worked example, what to check at each one, the common-size view.
- Operating Margin Formula: How Gross, Operating and Net Margin Fit TogetherOperating margin formula, with gross and net margin: what each measures, a worked example from revenue to net income, operating leverage, and the traps.
- Stock Down After Earnings Beat? How to Find the Real ReasonStock down after earnings beat? Learn the mechanisms behind it, what to check in the release for each one, and a fully worked example with the numbers.
- What Is a Good EPS? How to Read Earnings Per Share and EPS GrowthWhat is a good EPS? Why the level means little by itself, how to judge EPS growth and quality, with a worked example that splits growth into its three sources.
- What Time Do Earnings Come Out? Before the Open, After the Close, and Why It MattersWhat time do earnings come out? Before the open or after the close, why companies pick those windows, how to find a company's slot, and what to do first.