Market Cap
Fundamental Analysis
What it means
Market Capitalization: the total value of a company's outstanding shares, calculated as stock price multiplied by number of shares outstanding. It classifies companies into small-cap, mid-cap, and large-cap categories.
Example
A company with 1 billion shares outstanding trading at $200 per share has a market cap of $200 billion — classified as a large-cap stock, which typically has more stability but slower growth than small-cap stocks.
Mistake beginners make
Beginners think market cap is the value you would pay to buy the entire company. It only reflects the equity value — it does not include debt, cash, or other liabilities, so enterprise value is a more accurate total valuation measure.