Investment Glossary

An estimate of what a stock is truly worth based on the company's financial performance — revenue, cash flow, and growth — discounted to today's value. It is not the market price, which is driven by supply and demand.

The primary valuation method used by this platform. It projects future cash flows over 20 years and discounts them back to today using a discount rate. The sum of those discounted cash flows is the intrinsic value. No perpetuity terminal growth rate is used — the business must justify its price through what it produces over 20 years.

Total Liabilities minus Cash and Cash Equivalents from the latest quarterly Tadawul disclosure. Subtracted from the raw DCF value to arrive at equity value per share. A company with SAR 500 billion in projected cash flows may still have a modest intrinsic value per share if it carries significant liabilities. Shown explicitly as a step in the IV calculation.

For certain government-backed companies, TASIV may incorporate a sector-based exit value at the end of the explicit DCF projection to reflect value beyond the forecast period. Where applicable, this component is shown separately from the base DCF value.

The minimum return a company must earn to satisfy all its capital providers — used as the discount rate in DCF calculations. TASIV calibrates this rate based on factors including prevailing market conditions, the company's Beta (a measure of its price volatility relative to the market), and its sector. A higher discount rate produces a more conservative (lower) intrinsic value.

Used for banks, financial institutions, and other companies where balance-sheet value provides a more appropriate framework than cash-flow projections. TASIV considers Return on Equity (ROE) alongside book value when applying this valuation approach. A P/B of 1.0 means the stock trades at exactly its book value.

Used for high-growth companies where earnings are low or negative but revenue is growing strongly. It relates the price-to-sales ratio to the revenue growth rate, providing an alternative framework when current earnings don't adequately represent the company's growth profile. When the resulting value would not provide a sufficiently reliable basis for a meaningful per-share estimate, the platform shows N/A rather than a potentially misleading number.

Shown alongside every intrinsic value output. High: the available financial information and model characteristics provide a stronger analytical basis for the result. Medium: some factors introduce additional uncertainty, and the result should be interpreted with greater caution. Low: material data, financial, or model-suitability factors reduce confidence in the precision of the result. Confidence describes the analytical reliability of the model output — it does not describe whether a stock is a good or bad investment.

The rate used to convert future cash flows into today's value. A higher discount rate produces a more conservative (lower) intrinsic value. This platform sets the discount rate automatically based on the company's sector and beta.

Because intrinsic value cannot be known with certainty, TASIV presents three scenarios where applicable: Conservative (uses more cautious assumptions), Base (the central model assumptions), and Optimistic (illustrates the effect of more favorable assumptions). The range demonstrates how sensitive the estimate is to reasonable changes in the underlying assumptions — it is not a prediction of where the price will go.

Compares the market price to the model's intrinsic value output. Below Model Value: the market price sits meaningfully below the model output. Near Model Value: the price is trading close to the model output. Above Model Value: the market price sits meaningfully above the model output. This describes the gap between price and model output only — it is not a recommendation.

Cash generated from running the core business — collecting from customers, paying suppliers and employees. It is harder to manipulate than net income and is the primary input for DCF-CFO calculations. IFRS 16 lease accounting can inflate CFO for companies with large lease portfolios — the platform detects and flags this automatically.

An international accounting standard that requires companies to record lease obligations on their balance sheet. For companies with large lease portfolios (telecoms, fuel stations, retail chains), IFRS 16 can significantly inflate Operating Cash Flow relative to Net Income. TASIV detects this automatically using the CFO/NI ratio and applies a quality discount to prevent the inflation from inflating the DCF output.

Operating cash flow minus capital expenditure. FCF is what remains after the business has invested in itself — available for dividends, debt repayment, or acquisitions.

Net income divided by shareholders' equity. ROE is an important measure of profitability and is used in selected TASIV analyses, including the P/B valuation approach and Business Quality assessment.

Net income divided by the number of shares outstanding. Tells you how much profit the company earned for each share you own. Growing EPS over time is a positive signal.

Compares the current market price to earnings per share over the trailing twelve months. Shown for context — it does not feed into TASIV's intrinsic value calculation.

Uses the market's expectation of next year's earnings instead of the trailing twelve months. A lower Forward P/E than the trailing P/E may reflect expectations of higher future earnings, although changes in share price and earnings estimates can also affect the comparison. Shown for context only — it does not feed into TASIV's intrinsic value calculation.

A company's total assets minus its total liabilities, representing shareholders' equity reported on the balance sheet. Book Value per Share divides this amount by shares outstanding. It is an important input to the P/B valuation approach.

Total debt divided by earnings before interest, taxes, depreciation, and amortization. It is commonly used as an indicator of leverage by comparing debt with a measure of operating earnings. A lower ratio generally indicates lower leverage, although interpretation can vary by sector and business model.

A plain-language summary of a company's historical Revenue, Net Income, and Operating Cash Flow trends, shown on the Financials tab. Purely descriptive — it does not reference intrinsic value or make any investment judgment.

The steady annual growth rate that would take a value from its starting point to its ending point over a given number of years. Used to measure how fast revenue or earnings have grown. CAGR of 10% means the metric doubled approximately every 7 years.

A structural advantage that protects a company's profits from competitors. TASIV evaluates this across four pillars — Profitability, Predictability, Financial Strength, and Growth Resilience — producing an overall High, Medium, or Low classification where applicable. A High classification indicates stronger financial characteristics associated with business durability, while a Low classification indicates less evidence of those characteristics in the available financial data.

Measures how effectively a company converts its business activities into sustainable earnings. Consistently profitable companies are generally better positioned to reinvest and create long-term shareholder value. This pillar evaluates ROE, Net Profit Margin, and margin stability.

Measures how consistent a company's financial performance has been over time. Consistent financial results are generally easier to understand and value. This pillar evaluates Revenue, Net Income, and Operating Cash Flow consistency.

Measures a company's ability to remain financially resilient during changing business conditions. This pillar evaluates Debt / EBITDA, cash flow resilience, and consecutive profitable years.

Measures whether a company's historical growth has been sustainable over time rather than driven by short-term expansion. This pillar evaluates Revenue CAGR, growth consistency, and Net Income CAGR.

Net income divided by revenue, expressed as a percentage. Measures how much of each riyal of revenue a company keeps as profit after all expenses. A key input to the Profitability pillar of the Moat score.

Automated checks that run at different stages of the analysis. When a material issue is detected — such as missing data, an unusual accounting structure, or a result that falls outside reasonable expectations — TASIV may display an explanatory alert, reduce confidence in the result, or adjust the analytical treatment. Shown directly on the Intrinsic Value tab when relevant.

Displayed instead of an intrinsic value when the available information or a company's characteristics don't provide a sufficiently reliable basis for TASIV's supported valuation methodologies — for example, insufficient verified financial history, or a business structure not adequately represented by the available models. Financial data may still be shown even when the intrinsic value estimate is withheld. TASIV prefers an explained N/A to a misleading valuation.

An evaluation of whether a company's historical Revenue, Net Income, and Operating Cash Flow have followed sufficiently consistent patterns over time. Consistency describes the stability of the historical pattern and does not necessarily mean growth. It is one of the factors considered in TASIV's analytical assessment.

Core financial information used in TASIV's analysis passes through multiple verification layers, including licensed data acquisition, comparison with official Saudi Exchange disclosures where applicable, and quality review. Verification information is displayed where relevant.

Annual dividend paid per share divided by the current market price. A 4% yield means for every SAR 100 invested, you receive SAR 4 in dividends annually. A very high yield may signal the market expects the dividend to be cut.

Percentage of net income paid as dividends. A higher payout ratio means more of a company's earnings are being distributed to shareholders rather than retained for reinvestment. A payout ratio above 100% means the company is paying out more than it earns in the period, which may draw on reserves or debt.

A plain-language summary of a company's dividend-per-share trend and payment frequency over its recorded history, shown on the Dividend tab. Purely descriptive — it does not compare against valuation or make a sustainability judgment.

Provides context on whether recent dividend distributions appear supported by relevant financial measures, including payout information and financial trends. It is an analytical indicator, not a prediction or guarantee of future distributions.

Measures how much a stock moves relative to the overall market. Beta of 1.0 = moves with the market. Above 1.0 = more volatile. Below 1.0 = more stable. Used in discount rate calculation.