Read a fair value as a range, not a point

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Key idea: A fair value is an estimate with error bars. The wider the range and the lower the confidence, the less a gap to the price means.

A single fair value figure looks precise. It is not. It is the middle of a range of reasonable answers, and that range can be narrow for a steady utility or very wide for a young biotech.

On an Equity Rank stock page, three things tell you how much weight the number can bear: how far apart the methods are (Day 14), the confidence score, and any red flags or data warnings.

A stock 30% below a high-confidence fair value is a very different case from a stock 30% below a low-confidence one where the methods range from $20 to $90. The second gap may be noise.

A useful habit: before looking at the price, ask what would have to be true for the low end of the range to be right. If that story is plausible, the gap is smaller than it looks.

Quick check

Two stocks both trade 30% below their fair value. Stock A's methods agree closely; Stock B's range from $20 to $90. Which gap carries more information?

Look at a stock page's confidence and range →

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