Stock-analyzer.

This program was written entirely in python.

It uses stock data gotten from Yahoo finance API, and extracts important information related to the stock.

It can tell you the fair value of a stock, the margin of safety. These are important when analyzing a stock before making a purchase

Most new investors, might see a stock trending and decide to buy the shares in that trending stock. What's more effective when investing in a stock, is to calculate the fundamental analysis of that stock. Without a proper analysis of a stock, you might buy an overvalued stock and that could lead toa poor returns on investment.

Traditionally, stock fundamental analysis weren't automated. Thanks to Python, you can analyze any stock without the stress of analyzing traditionally.

These are the important metrics needed when analyzing a stock:

1. EBITDA
2. CAGR (Cummulative Annual Growth Rate)
3. QUICK RATIO.
4. NET PROFIT MARGIN.
5. RETURN ON ASSETS
6. AVERAGE NET INCOME GROWTH RATE.
7. COST OF DEBT.
8. REQUIRED RATE OF RETURN

EBITDA (EARNINGS BEFORE INTERESTS, TAXES, DEPRECIATION AND AMORTIZATION)

This is an important metric to know how a company utilizes its assets and capital. It's an indicator of a company's profitability calculated as revenue minus expenses excluding tax and interest.

EBITDA FORMULA: EBITDA= Net Income + Interest Expense + Taxes + Depreciation + Amortization.

AVERAGE NET INCOME GROWTH RATE

Net income growth shows how rapidly a company has been able to boost its "bottom line." Growth investors might look for companies with net income growth of, say, 20% or more.

COST OF DEBT

The cost of debt is the effective rate that a company pays on its debt, such as bonds and loans. Debt is one part of a company's capital structure, with the other being equity. Calculating the cost of debt involves finding the average interest paid on all of a company's debts.

TERMINAL VALUE

Terminal value is calculated by dividing the last cash flow forecast by the difference between the discount rate and terminal growth rate. The terminal value calculation estimates the value of the company after the forecast period.

FCF (Free cash flow)

Free cash flow per share (FCF) is a measure of a company's financial flexibility that is determined by dividing free cash flow by the total number of shares outstanding.

REQUIRED RATE OF RETURN (RRR)

It's the minimum return an investor will accept for owning a company's stock, as compensation for a given level of risk associated with holding the stock.

The average required rate of return in a stock is 10%

DISCOUNT FACTORS/RATE

The discount rate refers to the interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

AVERAGE GROWTH RATE

The average growth rate of a stock is 10%.

NET PROFIT MARGIN

Net Profit Margin (also known as “Profit Margin” or “Net Profit Margin Ratio”) is a financial ratio used to calculate the percentage of profit a company produces from its total revenue.

It measures the amount of net profit a company obtains per dollar of revenue gained.

THE MODEL I USED

In this stock analysis program, i used the Discounted Cash Flow (DCF) model to execute analysis on publicly traded company stocks.

Conclusion

The stock market is a wonderful investment vehicle, but it doesn't tolerate rash decisions that aren't backed up by understanding the fundamentals.

I believe this repository and the program would assist you in your investment journey.

Thanks