If you undervalue something or someone, you fail to recognize how valuable or important they are. We must never undervalue freedom + undervalued under·val·ued Even the best teacher can feel undervalued. = underrated. to think that someone or something is less important or valuable than they really are
A *stock* price which is perceived to be "too low" or cheap as indicated by a particular valuation model For instance, some might consider a particular company's stock price cheap if the company's price/earnings ratio is much lower than the industry average However, caution needs to be exercised Using the current P/E ratio is an imperfect way to value securities (we need to consider the expected future stream of earnings and discount by the appropriate risk adjusted rate) Hence, when one talks of undervaluation or overvaluation you are implicitly assuming some model of valuation It is always possible that the security is valued correctly and the you apply model is wrong
A stock price perceived to be too low or cheap, as indicated by a particular valuation model For instance, some might consider a particular company's stock price cheap if the company's price-earnings ratio is much lower than the industry average To refer to undervaluation or overvaluation implicitly assumes some model of valuation It is always possible that the security is valued correctly and that model applied is wrong
Stocks that are selling for less than their value according to analysts Fundamental analysts try to find undervalued stocks Takeover specialists often try to buy them