Fundamental analysis asks: what is this business worth, and is the market pricing it above or below that? The toolkit includes financial statements, competitive position, industry trends, and management quality.
It's the opposite of technical analysis (which studies price patterns). Long-term investors typically lean fundamental; short-term traders lean technical. Both approaches have devoted practitioners.
See also
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Open Decision Lab →Frequently asked questions
Do I need to be an accountant?
No — but comfort reading income statements, balance sheets, and cash flow statements helps. Free educational resources make this accessible to anyone patient enough to learn.
Related terms
Value investing
Buying companies for less than you believe they're worth, and holding until price catches up.
Growth investing
Focus on companies expected to grow revenue and profit faster than average.
EPS (earnings per share)
A company's profit divided by the number of shares outstanding.
Free cash flow (FCF)
Cash a business generates after paying to run and grow itself.