version: "1.0.0" name: valuation description: Estimate whether a stock looks cheap or expensive using a price-to-earnings (P/E) based fair-value method. Use when the user asks if a stock is over- or under-valued, or for a fair-value / target price.
Usage
When the user asks whether a stock is fairly valued, over-valued, or under-valued:
- Read
references/valuation-guide.md to pick a sensible target P/E for the company's sector. - Run
scripts/valuation_metrics.py with the current price, trailing EPS, and the target P/E,
e.g. --price 462.97 --eps 11.80 --target-pe 32.
- Report the computed P/E, the fair-value estimate, and the percentage upside/downside, then state
plainly whether the stock looks cheap or expensive on this measure.
Always remind the user that a single P/E heuristic is not investment advice and ignores growth, debt, and many other factors.