Equity analysis is the process of evaluating a company's stock to determine its value and potential for future growth. Analysts examine various factors, including financial statements, market trends, and economic conditions, to assess whether a stock is undervalued or overvalued. This analysis helps investors make informed decisions about buying, holding, or selling shares.
The goal of equity analysis is to provide insights into a company's performance and prospects. Analysts often use tools like discounted cash flow models and price-to-earnings ratios to compare companies within the same industry. This information is crucial for investors looking to maximize their returns.