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4 Free Tools to get Stocks Valuation Instantly!!
In this article, I would like to share with you my favorite secret tools, when I want to find out the valuation of the stocks I would like to invest. These tools are totally free to use, and will be helpful in your investment journey.
The first resource is GuruFocus and their discounted cash flow calculator. Just type in a stock's ticker symbol (like AMZN for Amazon) and GuruFocus will automatically run the numbers through its own DCF model to give you an estimate of the stock's intrinsic value.
For Amazon, GuruFocus currently puts the stock's fair value at $156.51 per share. With Amazon trading around $176 as I write this, that implies the stock modestly over-valued based on GuruFocus's estimate.
The second resource I want to mention is SimplyWall.St. They have a really user-friendly dashboard that shows you all sorts of fundamental information about a stock, including an estimate of its fair value based on a discounted cash flow model.
If we look up Amazon on SimplyWall.St, it shows a fair value estimate of $310 per share. Compared to the current market price of around $176, that suggests Amazon's stock is 40% under SimplyWall.St's fair value.
3. Jitta.com
The third resource is Jitta.com. it has one of the slickest and easiest-to-use dashboards for checking a stock's valuation. They've built their own special formula that takes into account stuff like how fast the company is expected to grow, what kind of competition it's facing, and how good the management team is. It boils all that down into a single stock score and a range of what Jitta thinks the stock should be worth.
Let's use Amazon as an example. If you type AMZN into Jitta's search bar, you'll instantly see a bunch of handy info, including:
● Jitta Score: This is Jitta's overall rating of the stock
● Jitta Line: This shows the range of what Jitta thinks the stock is really worth
As I'm writing this, Jitta estimates that Amazon's intrinsic value is around $158 per share. With the stock currently trading around $176 per share, that suggests Amazon's stock 10.13% below Jitta’s fair value. That gives us a quick and dirty sense of whether Amazon looks undervalued or not.
[Bonus] Morningstar
The final resource I really like is Morningstar's valuation estimates. Morningstar has its own team of analysts who come up their "fair value" of the stocks, the risk ranking and economic moat of the stock. While you usually need a paid subscription to get all of Morningstar's research, some brokerage platforms (like Interactive Brokers) will actually give you Morningstar's valuation estimates for free.
If you have a Interactive Broker account, you may login and go to "Fundamental Explorer," to access paid "Morningstar Research" on any stock, including AMZN. There, I can see that Morningstar's analysts currently believe Amazon's fair value is around $193 per share, which I can then quickly compare to the stock's current trading price.
So now we've got a bunch of different fair value estimates for Amazon from some pretty reliable sources (sorted from lowest to highest valuation):
GuruFocus: $156
Jitta: $158
Morningstar: $193
Simplywall. st: $310
As you can see, different companies value the same stock differently, because each of these sources is using its own proprietary model and making its own assumptions to come up with its valuation estimate.
As investors, there are a few different ways we can make sense of these different valuations:
● We could just average all the estimates together to come up with a single "consensus" fair value. In this case, the average of all four sources is $204.
● We could toss out any estimates that seem like outliers. Here, Simplywall.st’s $310 valuation is quite a bit higher than the others, so we might exclude that one. If we average the other three, we get a fair value of around $169.
● We could take the most conservative (i.e. lowest) estimate of the bunch. In this case, that would be Gurufocus’s $156 fair value target.
Based on the above, Amazon's valuation is between $156 and $310.
Here we go! we can now find out the intrinsic value of the company within minutes!