Many investors buy shares based on gut feeling or because they are "on trend". But if you want to be successful in the long term, you need to know whether a company is fundamentally strong. Fundamental analysis helps you to determine the true value of a share - regardless of the current price.
1. business model - How does the company earn money?
✅ Questions you should ask yourself:
- Is the business model understandable and future-proof?
- Does the company have competitive advantages (brand, patents, network effects)?
- What does the industry look like - is it growing or stagnating?
✅ Example:
- Apple not only earns money with iPhones, but increasingly with services (iCloud, App Store, Apple Music).
- Tesla is not just a car manufacturer, but a technology and energy company.
2. key financial figures - Is the share too expensive or a bargain?
To value a share correctly, you need to know these key figures:
📌 P/E ratio (price-earnings ratio)
- Formula: Price / earnings per share
- Shows how often the profit is included in the current share price.
- Rule of thumb:
- P/E ratio < 15 → Potenziell unterbewertet
• KGV > 25 → High valuation, only justified with strong growth
📌 P/E ratio (price/sales ratio)
- Formula: Market capitalization / turnover
- Shows how highly the market values the company in relation to turnover.
- Rule of thumb:
- KUV < 1 → Günstig bewertet
• KUV > 5 → Highly valued, only makes sense with strong growth
📌 Return on equity (ROE)
- Formula: Profit / equity
- Shows how efficiently the company uses its own capital.
- Rule of thumb:
- ROE > 15 % → Strong company
- ROE < 10 % → Weak profitability
📌 Debt-equity ratio
- Shows how much debt capital the company is using.
- High debt = high risk, especially with rising interest rates.
✅ Example:
- Microsoft has a high return on equity and stable → strong long-term growth.
- Start-ups like Beyond Meat have high valuations but losses → high risk!
3. growth & future prospects
✅ Important questions:
- Is turnover growing annually?
- Can the company increase prices or is it dependent on fluctuating costs?
- Is profit increasing or is money being burned on expansion?
✅ Example:
- Amazon invested heavily in growth for a long time → Today one of the most profitable companies.
- Netflix is no longer growing as strongly, but has high costs → increasing competitive pressure.
4. dividends or growth?
- Dividend stocks (e.g. Coca-Cola, Johnson & Johnson) pay out regularly.
- Growth stocks (e.g. Nvidia, Tesla) prefer to invest profits in expansion.
💡 Conclusion:
A hyped company is not automatically a good stock! If you want to invest, you should understand the business model, pay attention to key figures (P/E ratio, KUV, ROE) and analyze long-term growth.
🔥 Which key figure is most important to you when analyzing shares? Write it in the comments!
🔍 Disclaimer: No investment advice - just my personal assessment. Everyone should do their own research!
