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Finance Dictionary and Glossary of Investment Terms
Something whose price is below its perceived value. opposite of overvalued.
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.
A stock or other security that is trading below its true value.