undervalued

Undervalued

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.

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undervalued

Of, relating to, or being a security that trades at a price lower than it logically should trade. Determining whether a security is undervalued is a subjective judgment. Compare overvalued.