intrinsic value
This term describes a quality or worth that exists as a natural, permanent part of an object or person, rather than being granted by external appraisal or temporary circumstances. In philosophical and ethical discussions, it refers to things that are valuable for their own sake, contrasting with instrumental value, where something is only useful as a means to an end.
In financial contexts, the term shifts toward a technical calculation. It represents the "true" worth of an asset based on fundamental analysis—such as cash flow and assets—rather than the volatile price dictated by the stock market. While the philosophical sense is abstract and qualitative, the financial sense is typically quantitative and objective.
Meanings
The inherent worth of something, independent of external factors, market demand, or its utility to others.
The philosopher argued that human life possesses an intrinsic value that transcends any economic utility.
The actual or perceived true value of a financial asset based on an objective calculation of its fundamentals, as opposed to its current market price.
Investors often buy undervalued stocks when they believe the intrinsic value of the company is higher than the current share price.