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Deep Dive: Enterprise Value vs Market Cap — What Investors Get Wrong About Company Size

When investors talk about how big a company is, they almost always cite market capitalisation. Apple is a $3.9 trillion company. AT&T is a $198 billion company. These numbers are technically correct, but they tell a dangerously incomplete story. Market cap measures what equity shareholders own. Enterprise value measures what you would actually have to pay to acquire the entire business — its equity, its debt, and the cash you would pocket on day one. The distinction matters more than most investors realise. AT&T's market cap is $198 billion, but its enterprise value is closer to $354 billion because the company carries $174 billion in debt. Alphabet's market cap is $3.8 trillion, but its enterprise value is actually lower — around $3.76 trillion — because it sits on a $127 billion cash pile that exceeds its debt. These are not academic differences. They change how you rank companies, how you compare valuations, and whether a stock is actually cheap or expensive. This guide breaks down exactly how enterprise value works, when to use it instead of market cap, and how real balance sheet data from the largest companies in the market reveals a picture that share prices alone cannot provide.

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Deep Dive: How to Value a Stock — P/E, EV/EBITDA, DCF and the Metrics That Actually Matter

Every stock has a price, but not every stock is worth what it costs. The difference between a stock's market price and its intrinsic value is the central question of investing — and answering it requires understanding the metrics that separate cheap stocks from genuinely undervalued ones. In February 2026, the gap between valuation approaches has never been more visible. Apple trades at a P/E ratio of 33.5x while generating $99 billion in annual free cash flow. Microsoft sits at 24.9x earnings despite being the world's third-largest company by market cap. Nvidia commands a 47x multiple as investors price in years of AI-driven growth. Same market, same economy, wildly different valuations — and each one tells a different story about what investors expect. This guide breaks down the five valuation metrics that matter most: P/E ratio, EV/EBITDA, price-to-free-cash-flow, discounted cash flow analysis, and dividend yield. For each metric, we'll explain what it measures, when it works, when it misleads, and how professional investors actually use it. Whether you're evaluating your first stock or stress-testing a portfolio, these are the tools that separate informed investing from speculation.

stock valuationP/E ratioEV/EBITDA