Fundamental Analysis for Stocks

When analyzing stocks, you’re essentially asking one question:

“Is this company worth investing in based on how it’s actually performing?”

Unlike technical analysis (which looks at price charts and trends), fundamental analysis digs into the company’s actual business performance, financials, leadership, and industry conditions.

Let’s break it down.

Growth Potential

Start by asking:
Is the company growing or struggling?
For example, if you’re looking at Microsoft is their revenue increasing? Are they launching new products or expanding into new markets? Or are they cutting jobs and missing targets?

Growth is the engine that drives stock price appreciation.

Earnings Season

One of the most important periods in the stock market is earnings season, which happens every quarter.

This is when companies like Apple, Google, Microsoft, JP Morgan, etc., release their earnings reports. These reports reveal:

• Revenue & profit (compared to analyst expectations)
• Forward guidance (their outlook for the next quarter/year)
• Key financial metrics like EPS (Earnings Per Share), margins, and more

Beat expectations? Stock may go up
Miss expectations? Stock may drop sometimes hard

What Does the Company Do?

Ask:
What sector is this company in, and how is that sector performing?
Example: Apple sells high-end electronics. If the smartphone market is slowing down, or consumers are cutting back on big purchases, Apple’s revenue might take a hit — even if the company is still strong.

Understanding the broader industry trends gives you context.

Watch the Competition

No company operates in a vacuum. Keep an eye on rival firms.

Example:
If Snap reports weak advertising revenue, that could hint at trouble for Meta (Facebook) too, since both rely heavily on digital ad dollars.

Competitor performance often gives early signals.

Leadership Matters

A company is only as strong as the people running it.

Ask yourself:

• Who’s the CEO and executive team?
• Do they have a strong track record of growth and innovation?
• Have there been any scandals or leadership shakeups?

News about executive departures or poor leadership decisions can rattle investor confidence and move the stock price.

Market News & Buyout Rumors

Always keep an ear out for “market noise” , rumours, headlines, or sudden buzz.

Example: When rumours emerged that Manchester United’s owners were exploring a sale, their stock spiked on speculation, even before anything official was announced.

In some cases, rumours of acquisitions, partnerships, or regulatory changes can cause a big move sometimes even before earnings are reported.

In Summary: Key Questions to Ask

1. Is the company growing?
2. How were their latest earnings?
3. What sector are they in, and how is it performing?
4. How are their competitors doing?
5. Who’s running the show?
6. Is there any buzz, news, or rumours around the company?

Fundamental analysis helps you understand the “why” behind a stock’s price — and whether the price reflects the company’s true value.