1. Intrinsic values and stock prices The intrinsic value of a company's stock, also known as its fundamental value, refers to the stock's true value based on expected future cash flows and the risks involved. The value perceived by stock market investors detemines the market price of a stock. A stock trading at a price below its intrinsic value is considered to be undervalued. A stock trading at a price above its intrinsic value is considered to be overvalued. In a state of market equilibrium, the intrintic value of the stock will be the market price of the stock. An analyst with a leading investment bank tracks the stock of Mandalays Ine. According to her estimations, the value of Mandalays Incis stock should be $115.24 per share, but Mandalays Inc.y stock is trading at $89.57 per share on the New York 5 took Exchange (kr5t). Considering the analyst? expectations, the stock is currently: Undervalued In equisbrium Overvalued