Fundamental analysis is a method used to evaluate the intrinsic value of a security, such as a stock. It involves examining various financial and economic factors, including a company's earnings, revenue, and overall market conditions. Analysts look at financial statements, industry trends, and economic indicators to determine whether a stock is undervalued or overvalued. This approach helps investors make informed decisions by focusing on the underlying factors that drive a company's performance. By understanding the fundamentals, such as earnings per share and price-to-earnings ratio, investors can assess the potential for future growth and profitability, guiding their investment strategies.