Fundamental analysis is a method used to evaluate the intrinsic value of a security, such as a stock. It involves examining various factors, including a company's financial statements, management team, industry position, and overall economic conditions. By analyzing these elements, investors aim to determine whether a stock is undervalued or overvalued in the market. This approach contrasts with technical analysis, which focuses on price movements and trading volumes. Fundamental analysis is often used by long-term investors who seek to understand a company's true worth and make informed investment decisions based on its potential for growth and profitability.