Stock-investing metric glossary
Plain-language explanations of metrics that come up often in US stock analysis, like PER, ROE, and FCF. We cover definitions, formulas, and what a high or low value means (how to read it). All explanations are factual descriptions, not buy/sell recommendations.
How to read this
- New to this? — Reading just 'In plain terms' and 'What it tells you' for each term is enough to get oriented.
- Want more depth? — The 'Caution' box shows when a metric gets distorted and which metrics to read alongside it; the 'Story' box shows real historical cases.
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You can search by term name, alias (P/E), or one-line meaning. English abbreviations, full names, and market slang all work.
Type ‘story’ or tap the Stories only chip below to see only terms with a real historical case. Currently 143 terms (45 with stories).
Shortcuts — ‘Stories only’ filters to terms with a case; the rest jump to that group
Valuation
Metrics that gauge whether a stock is expensive or cheap relative to its earnings, assets, or sales.
PER (Price-to-Earnings Ratio)Story
The headline valuation metric — how many times earnings per share (EPS) the stock trades at.
PBR (Price-to-Book Ratio)Story
How many times book value per share (BVPS) the stock trades at — price versus the company's net assets.
PSR (Price-to-Sales Ratio)Story
How many times annual sales the market cap is — used to value growth companies with little or no profit.
EV/EBITDA (Enterprise Value to EBITDA)Story
How many times EBITDA the enterprise value (EV) is — a valuation multiple that values the company including its debt.
Dividend YieldStory
What percent of the share price a year of dividends is — the annual return you earn from dividends by holding the stock.
DCF (Discounted Cash Flow)
A method that estimates a "theoretical fair value" by converting future earnings into present value and summing them.
PEG (Price/Earnings to Growth)Story
PER divided by the earnings growth rate — gauges whether a stock is expensive once its growth speed is taken into account.
Payout Ratio
What percent of earnings a company pays out as dividends — gauges dividend capacity and sustainability.
Ex-Dividend
The cutoff date from which buying no longer earns this dividend — the right to the dividend drops off, and the price usually opens lower by the dividend amount.
Dividend Growth · AristocratsStory
How steadily a company has raised its dividend year after year — long-time raisers are called "Dividend Aristocrats."
FCF Yield (Free Cash Flow Yield)
What percent of market cap free cash flow is — gauges whether the price is cheap or expensive based on the cash the company actually generates.
Profitability
Metrics for how efficiently a company earns from its capital, assets, and sales.
ROE (Return on Equity)
A profitability metric showing what percent of shareholders' capital (equity) the company earns in a year.
ROA (Return on Assets)
How much the company earns on its total assets — asset efficiency including debt.
ROIC (Return on Invested Capital)
How much the core business earns on the capital actually put into it — gauges value creation by whether it clears the cost of raising that capital.
Operating Margin
The share of sales left as operating profit after core-business costs — the company's core-business profitability.
Net Margin
The share of sales left as final profit after all costs (operating, interest, taxes).
SBC (Stock-Based Compensation)
The cost of stock a company gave employees instead of cash — a non-cash expense that eats into profit and dilutes shareholders' stakes.
AccrualsStory
How large the gap between book profit and actual cash is relative to assets — a quality metric for whether profit has been inflated.
Buyback (Share Repurchase)Story
A company buying and retiring its own shares — reducing the share count to raise per-share value, a form of shareholder return.
Gross Margin
The share of gross profit left after the direct cost of making the product (cost of goods sold) — the top-stage profitability among the profit tiers.
Growth
Metrics for how fast revenue and earnings are expanding.
Cash Flow
Metrics that look at actual cash left over rather than book earnings.
Stability
Metrics for debt burden and financial soundness.
Debt-to-Equity (D/E)Story
How much debt there is relative to shareholders' equity — a metric for financial stability and leverage.
Net Debt to EBITDA
How many years it would take to pay off net debt with a year's operating cash-like earnings (EBITDA) — a metric for debt-repayment fitness.
Current Ratio
How many times the debt due within a year the assets convertible to cash within a year cover — a metric for short-term ability to pay.
Quick Ratio
How many times short-term debt the assets immediately convertible to cash (excluding inventory) cover — a stricter ability to pay than the current ratio.
Interest Coverage Ratio
How many times over a company can pay its interest with the operating profit it earned — a metric for the fitness to bear debt.
Basics
Foundational concepts that underpin other metrics.
EPS (Earnings Per Share)
A company's net income divided by shares outstanding — "the profit one share earned." The denominator of PER.
Market Cap (Market Capitalization)Story
Current share price × shares outstanding — what the whole company would cost at today's price (the company's size).
TTM (Trailing Twelve Months)
The most recent four completed quarters added into a one-year figure — the basis for reading lumpy quarterly results, smoothed and up to date.
YoY (Year over Year)
Comparing this period with the same period a year ago — the most basic comparison basis, stripping out seasonality to see real growth.
QoQ (Quarter over Quarter)
Comparing this quarter with the immediately prior quarter — catching the very latest change fast, but subject to seasonality.
Forward / Trailing
Compute a metric from past results and it is trailing; from future estimates and it is forward — the same PER differs in value by which.
Blue Chip
A large, high-quality stock that has earned profits steadily over a long time — the nickname for a "reliable stock," taken from the most valuable blue chip in a casino.
Penny Stock
A very low-priced small-cap stock (usually under $5) — with high volatility and a big risk of manipulation and fraud, an area that needs special caution from beginners.
Shares Outstanding (Outstanding & Float)
The total number of shares a company has issued — the foundational number that is the denominator of market cap, EPS, and many metrics.
ADR (American Depositary Receipt)
A receipt that lets a foreign company's stock trade on US exchanges — the channel to invest in overseas firms through a US account.
Financial Statement Basics
The basic line items and terms of the financial statements that feed into the metrics.
CapEx (Capital Expenditure)
Money spent on long-lived facilities like factories, machines, and buildings — investment spending for the future.
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)Story
Operating profit with depreciation added back — a profit yardstick close to the cash the core business generates.
OCF (Operating Cash Flow)
The cash a company actually earned by running its core business — real money in, not book profit.
Accounts Receivable
Money owed for goods or services already sold but not yet collected — booked as sales but not yet in as cash.
Working Capital
Money tied up in running the business — current assets minus current liabilities, the funds needed for short-term operations.
GoodwillStory
The premium paid above net asset value when buying another company — the unseen value of brand, customers, and so on.
Net Debt
Total debt minus cash on hand — the real debt burden after accounting for cash that could pay it off right now.
BPS (Book Value Per Share)
Shareholders' equity divided by shares outstanding — the book net assets behind one share. The denominator of PBR.
Depreciation & Amortization (D&A)
Spreading the yearly decline in value of long-lived assets across years as an expense — a cost with no cash going out.
GAAP / Non-GAAP (Adjusted Earnings)
The difference between official earnings reported under set accounting standards (GAAP) and the adjusted (Non-GAAP) earnings a company reports separately by excluding certain items.
Revenue (Sales)
The total a company earned selling products and services — the top line of the income statement, where all profit and valuation begin.
Operating Income (EBIT)
Revenue minus the costs of the core business (cost of goods + selling/admin) — the profit that shows the core business's strength, before interest, taxes, and one-offs.
Net Income (Bottom Line)
The profit finally left after subtracting all costs, interest, and taxes from revenue — the bottom line of the income statement.
Shareholders' Equity
Total assets minus the debt that must be repaid — the true shareholders' share. The net assets behind ROE, PBR, and debt-to-equity.
Total Assets
The sum of all economic resources a company holds — its entire household, funded by shareholders' money (equity) and borrowed money (debt).
10-K / 10-Q (SEC Filings)
The earnings reports US-listed companies must file with the SEC — the 10-K is annual (audited), the 10-Q quarterly. The source of our financial data.
Preferred StockStory
Stock that receives dividends first and in a set amount but usually has no voting rights — sitting between stock and bond in character.
Financial Statements (Balance Sheet, Income Statement, Cash Flow Statement)Story
The three tables that show a company's household — what it owns (balance sheet), what it earned (income statement), and the cash that actually moved (cash flow statement).
Earnings & Market
Terms for earnings announcements and the market expectations around them.
Earnings Surprise
How far reported results (mainly EPS) differ from the market's expectation (consensus) — beating it is a surprise, missing it a shock.
Consensus (Analyst Consensus)
The average of the earnings and target estimates from multiple brokerage analysts — the market's expectation level gathered into one number.
Guidance (Earnings Guidance)
A company's own forecast of next quarter's or the year's results — the company's self-forecast that shapes market expectations and moves the price.
Whisper NumberStory
An unofficial earnings expectation circulating in the market apart from the official consensus — even a result beating the consensus can see the price fall if it misses this hidden bar.
Earnings Call
A conference call where a company reports quarterly results and management explains and answers questions directly — where the context and outlook behind the numbers come out.
Extended Hours (Pre-market / After-hours)
Trading that opens before and after the US regular session — the time when the market reacts first to results and news.
Macro & Economy
The macro environment that moves prices and earnings from outside the company — rates, inflation, central banks.
InflationStory
A general rise in prices — the currency loses value, affecting companies' costs, consumption, rates, and stock prices broadly.
Interest Rate (Policy Rate)
The price of borrowing money — the policy rate set by the central bank is the basis for loans, deposits, bonds, and stock valuation.
The Fed (Federal Reserve) / FOMCStory
The US central bank — it sets the policy rate and manages the money supply to steer prices and employment, and its decisions move markets worldwide.
CPI (Consumer Price Index)Story
The headline gauge of how much prices rose, bundling the prices of goods and services consumers buy — the key yardstick for measuring inflation.
Nonfarm Payrolls (NFP)
How many jobs were added in a month in US sectors excluding farming — an economic thermometer and a key basis for the Fed's rate decisions.
Retail Sales
How much consumers spent in stores and online over a month — it shows the strength of consumption, which makes up about 70% of the economy.
Consumer Sentiment
A survey-based gauge of how optimistic or pessimistic consumers are about the economy and their own finances — a window into consumption ahead.
PPI (Producer Price Index)
How much the prices companies receive when they make and sell goods (producer-stage prices) rose — the stage before consumer prices (CPI).
PCE (Personal Consumption Expenditures Price Index)
A price gauge based on consumers' actual spending — the yardstick the Fed weighs most in judging its inflation target (2%).
GDP (Gross Domestic Product)Story
The sum of the value of all goods and services a country produces over a period — the largest indicator of the economy's size and growth pace.
PMI / ISM (Purchasing Managers Index)
An index built from surveying company purchasing managers — above 50 is expansion, below is contraction. A leading indicator for quickly reading the economy's direction.
Initial Jobless Claims
The number of people who newly filed for unemployment benefits in a week — the fastest weekly employment gauge, catching cracks in the labor market early.
Reserve Currency
The currency used as the standard for international trade and foreign reserves — currently the US dollar. That is why US rates and policy move markets worldwide.
Exchange Rate
The exchange ratio between two countries' money — when the dollar strengthens against your home currency, the value of US stocks in your currency changes too.
Carry Trade (Yen Carry Trade)Story
Borrowing the money of a low-rate country to invest where rates and returns are higher, pocketing the difference — the Japanese yen is the classic (yen carry). Its unwind shakes markets.
Quantitative Easing / Tapering (QE)Story
A policy where the central bank buys government bonds and other assets in bulk to release money into the market (QE), and gradually reducing those purchases (tapering).
Yield Curve / InversionStory
The gap between long- and short-maturity government bond yields — usually long is higher, and when short rises above long (inversion), it is seen as a recession warning.
U.S. Treasury SecuritiesStory
Bonds the US government issues to borrow money — considered the world's safest asset, they become the reference point for rates and stocks.
Soft Landing / Hard LandingStory
If the central bank tames prices by raising rates while avoiding recession, that is a soft landing; if the economy bends sharply, a hard landing.
Corporate Events
Corporate and market events that affect the share price and shareholder stakes — short selling, secondary offerings, M&A.
Short SellingStory
A trade that borrows stock to sell first, then buys it back cheaper later to repay and pocket the difference — a way to bet on a price falling.
Equity Offering / Dilution
A company issuing new stock to raise funds — the share count rises and each existing shareholder's portion (stake) thins.
Shelf Registration (Form S-3) / Mixed Shelf
Registering in advance so a company can issue stock or bonds later — the registration itself is not an issuance but "the right to take it off the shelf when needed."
Mergers & Acquisitions (M&A)
One company buying another (acquisition) or two becoming one (merger) — it grows size in one stroke but can erode value if bought too dear.
Private Credit
Lending made directly to companies by private funds and others, instead of banks or public bonds — fast and flexible but at a relatively high rate.
Short Covering
A short seller buying back borrowed stock to repay it — when this buying crowds in, it can push the price up and lead to a short squeeze.
Stock SplitStory
Splitting one share into several to lower the per-share price — the company's value stays the same; only the share count rises, making trading easier.
IPO / Going Public (Initial Public Offering)
A private company opening and listing its stock to the general public for the first time — the starting point where anyone can buy that stock.
Spin-off
A company separating one business unit into an independent, separately listed company — existing shareholders receive shares of the new company.
Market Trends & Sentiment
Terms for the overall mood and flow of the market and investor psychology — bull markets, corrections, short squeezes.
Short SqueezeStory
When a heavily shorted stock spikes instead, short sellers buying back to limit losses crowd in and drive the price up even more.
Bull Market / Bear Market
A phase where prices broadly rise is a bull market, where they fall is a bear market — a roughly 20% drop from the peak is the usual bear-market threshold.
Market Correction
A phase where prices fall about 10% from the peak in the short term — shallower than a bear market (20%↓), commonly seen as a breather amid a rise.
Volatility / VIXStory
How much a price swings up and down — larger means more uncertainty and fear. The whole-market volatility gauge is the VIX (the "fear index").
Dead Cat Bounce
A plunging price briefly rebounding before falling again — a phrase for a temporary bounce that is not a real recovery.
Take Profit / Stop Loss
Selling to lock in a gain is taking profit; selling to limit a loss is a stop loss — both set "when to sell" in advance to curb emotional trading.
Averaging Down
Buying more of a stock that fell to lower the average purchase price — favorable on a rebound, but it grows the loss if it keeps falling.
The Tail Wagging the Dog
A small part (the tail) swaying the whole (the dog) — in markets, it refers to derivatives or a few stocks shaking the whole market.
Black SwanStory
An extreme event no one predicted that shakes markets when it happens — afterward it tends to be dressed up as "I knew it."
Goldilocks (Goldilocks Economy)
A "just right" economic state, neither too hot nor too cold — moderate growth and stable prices, the most favorable environment for stocks.
Irrational ExuberanceStory
A state where asset prices swell far above real value, swept up in baseless optimism — the psychological foundation of a bubble.
Catching a Falling Knife
Rashly buying a plunging stock because it "got cheap" — a warning likened to getting cut trying to catch a falling blade by hand.
FOMO (Fear Of Missing Out)
The anxiety of chasing in late for fear of being the only one to miss out — the classic emotion that pulls up the tail end of a bubble.
Gray Rhino
A big, clearly visible and well-warned risk that people ignore until it hits — the opposite of the unpredictable black swan.
Calendar Effects (Santa Rally / January Effect)
A statistical tendency for prices to rise or fall at certain times — a year-end rise (Santa rally), January small-cap strength (the January effect), etc. But it is not always right.
Quadruple Witching Day
The day (each quarter) when four kinds of derivatives — index futures and options and the like — all expire at once. Volume explodes and volatility rises.
Meme Stock
A stock that becomes a topic on social media and online communities and spikes as retail investors pile in, regardless of results.
Fear & Greed Index
A sentiment gauge showing on a 0–100 scale whether market participants are gripped by fear or carried away by greed — CNN's is famous.
Bull Trap / Bear Trap
Faking a rise then falling is a bull trap; faking a fall then rising is a bear trap — false signals that look like a trend reversal.
Dead Money
A stock stuck for a while, neither rising nor falling — a phrase for money locked up, eating only opportunity cost.
Circuit BreakerStory
A safety device that briefly halts the market when prices plunge, to cool overheating and panic — named after an electrical breaker tripping on overload.
Gap (Gap Up / Gap Down)
The opening price starting sharply away from the prior day's close — the result of overnight results and news being priced in at once.
Market LeadersStory
A phase where a few leading stocks driving the rise pull the whole market — money crowds into the few and the rest are left behind.
Investing Principles
Core principles and mindsets for winning over the long run — diversification, margin of safety, the moat.
DiversificationStory
Spreading money across many places rather than betting it all on one stock or asset to reduce risk — the practice of "don't put all your eggs in one basket."
Margin of SafetyStory
Buying well below your estimated value so that even if your judgment is wrong, the loss is limited — the core principle of value investing.
Economic MoatStory
A durable competitive advantage rivals cannot easily copy — like a moat around a castle, it protects a company's profits. A concept stressed by Warren Buffett.
CompoundingStory
The snowball effect of returns earning further returns — its power grows explosively the longer the time, the core principle of long-term investing.
Contrarian InvestingStory
Going against the crowd — buying when everyone sells in fear and selling when they buy in greed. Hard to do, but it holds that big opportunity lies within fear.
Momentum
An approach that rides the tendency for rising stocks to rise more and falling stocks to fall more — a trend-following strategy of "the trend is your friend."
Mean Reversion
The tendency for prices and metrics that stray too far to eventually return to the average — the view that what rose excessively falls, and what fell rises.
Dollar-Cost Averaging (DCA)
Steadily buying a set amount in installments rather than all at once, to smooth out the swings in your average purchase price.
Derivatives
Derivatives based on stocks and indices — options and futures, used for hedging or directional bets.
Options (Call / Put)
A derivative that buys and sells the right to buy (call) or sell (put) a stock at a set price — used for hedging (insurance) or directional bets.
Futures
A contract agreed in advance to buy or sell on a set future day at a set price — used for directional bets or hedging on indices, commodities, and more.
Stock Indices
Indices that represent the broad US market (S&P 500, Nasdaq, Dow) and the ETFs that track them.
S&P 500 (S&P 500 Index)
An index bundling 500 leading US large-caps by market-cap weight — the most widely used yardstick representing the whole US stock market.
NASDAQ
The index of the US market (NASDAQ) where many tech and growth companies are listed — with a large big-tech weight, it represents the tech-stock trend.
Dow Jones
The oldest index, made from the stock prices of 30 leading US blue chips — being price-weighted, high-priced stocks have a large effect.
ETF (Exchange-Traded Fund)
A fund holding many stocks in one basket, tradable like a stock — the easiest way to buy a whole index like the S&P 500.
Expense Ratio
What percent of assets an ETF or fund takes as management cost per year — an invisible fee that eats into returns.
Leveraged / Inverse ETF
An ETF designed to amplify an index's daily move 2–3× (leveraged) or move opposite to it (inverse) — a high-risk product for short-term bets.
Technical Indicators
Indicators that read price action, trend, and overheating from the chart rather than the financials.
RSI (Relative Strength Index)
An overbought/oversold indicator on a 0–100 scale, comparing the strength of recent up days versus down days.
MACD (Moving Average Convergence Divergence)
An indicator that reads the direction and strength of a price trend from the gap between short- and long-term moving averages.
Moving Average (SMA)
A line drawn from the average of closing prices over a period — the basic tool for showing a price trend smoothly.
Bollinger Bands
An envelope drawn above and below a moving average by the amount of volatility, showing whether price is higher or lower than usual.
BetaStory
How many percent this stock moves on average when the market moves 1% — it measures the degree of moving with the market, not the size of risk.
Golden Cross / Death Cross
A chart signal: a short moving average breaking above a long one is a golden cross (up-turn signal); breaking below is a death cross (down-turn signal).
Support / ResistanceStory
A price level where price tends not to fall below is support, one it tends not to rise above is resistance — zones formed by many people's memory and orders converging.
Trading VolumeStory
The quantity of a stock bought and sold over a period — a measure of how much trading actually joined a price change.
Candlestick Chart (Up/Down Candles)Story
A chart showing a day's (or period's) open, close, high, and low in a single candle shape — up is a bullish candle, down is a bearish one.
Trendline
A line drawn connecting price highs or lows — a tool to see at a glance whether the flow heads up, down, or sideways.
TPO / Market Profile (Time Price Opportunity)Story
A short-term trading analysis that stacks letters by how long trading stayed at each price level during a day, to see where price stayed longest.
POC (Point of Control)
The price where trading stayed longest in Market Profile — seen as the center-of-gravity price where the most trading gathered that day.
Value Area
The price zone where about 70% of all trading gathered in Market Profile — seen as the price range the market accepted as fair that day.
How each metric is calculated in Stocklore (precise formulas, thresholds, sources) is on the Methodology page. The glossary covers plain-language explanations for beginners; methodology covers the exact formulas.
These explanations are informational and for reference only, and do not recommend buying or selling any particular stock. Investment decisions and responsibility are your own.