What is the primary goal of fundamental analysis?

The primary goal of fundamental analysis lies in evaluating securities based on their intrinsic value and market position. This approach involves studying various factors such as a company's financial health, management quality, market conditions, and overall economic factors to determine the true value of a security. By conducting thorough investigations into these areas, analysts aim to identify stocks that are undervalued or overvalued relative to their intrinsic value.

This method allows investors to make informed decisions based on the underlying business and economic fundamentals rather than relying solely on market trends or short-term price movements, which can be influenced by speculative behavior. As a result, fundamental analysis targets long-term investment strategies by aiming for a deeper understanding of a company's potential for growth and profitability.