How to Research Stocks

Researching stocks can give you a long-term advantage as an investor.

By Matthew Frankel, CFP – Updated Jun 5, 2025 at 9:29 AM | Fact-checked by Frank Bass

Key Points

Analyzing stocks correctly can uncover underpriced stocks, aiding in superior long-term gains.
Fundamental analysis finds stocks' real value, while technical analysis predicts short-term trends.
Master key metrics like P/E and debt-to-EBITDA ratios to evaluate financial health and investment risk.

Analyzing stocks helps investors find the best investment opportunities. By using the correct analytical methods when researching stocks, it is possible to find stocks trading for a discount to their true value. This, of course, can put you in a great position to capture future market-beating returns.

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Two professionals researching stock charts on a monitor. — Image source: Getty Images.

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It is far more important to invest in a good business than a cheap stock.
-- Warren Buffett

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Data sources: CNBC, YCharts. Figures as of May 12, 2025. P/E ratio = price-to-earnings ratio. PEG ratio = P/E-to-growth ratio. EBITDA = earnings before interest, taxes, depreciation, and amortization. TTM = trailing 12 months.
Metric	Home Depot	Lowe's
P/E ratio (past 12 months)	25.2	19.0
Projected earnings growth rate	5.0%	4.1%
PEG ratio (expected)	5.0	4.6
Debt-to-EBITDA ratio (TTM)	1.97	2.86

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Solid analysis can help you make smart decisions

There's no one correct way to analyze stocks. The goal of stock analysis is to find companies you believe are good values and great long-term businesses. Not only does this help you find stocks likely to deliver strong returns, but using analytical methods like those described here can also help prevent you from making bad investments and losing money.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

TMFMattFrankel

@MattFrankelCFP

Matt Frankel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot. The Motley Fool recommends Lowe's Companies. The Motley Fool has a disclosure policy.