An analyst’s view about asset prices that takes into consideration all relevant fundamental factors (fundamentals) at the time. The resulting value is known as an asset’s intrinsic value.

Pricing on fundamentals is perceived as the price level against which prices of assets such securities are set for comparison. Securities are said to be overpriced (overvalued) or underpriced (undervalued) in relation to their prices derived from fundamentals.

For example, an asset or investment is perceived to be overvalued when it trades for more than its intrinsic value. For example, if a company’s stock with an intrinsic value of $10, based on its current earning is presently trading at $13, it will be perceived “overvalued” by the market, and hence this would add downside pressures on it.