Put the price beside the assumptions.

Fair value is an estimate of what a stock is worth based on assumptions about earnings, growth, and discount rates. It is a model output, not a market price, and different assumptions produce different values. Its purpose is to frame whether the current price looks demanding or modest relative to those assumptions.

Common approaches include discounted cash flow models, which project future cash flows and discount them to the present, and multiple-based models, which compare earnings or sales ratios to peers. Every model depends on inputs that can be debated. That is why Wave Radar keeps the assumptions visible next to the resulting range.

Small changes in growth or discount-rate assumptions can move a valuation estimate substantially. A band communicates that sensitivity honestly instead of implying false precision. The width of the band is itself information: a wide band means the valuation is highly assumption-dependent.

Valuation answers whether the price looks reasonable; structure answers when the market might agree. A stock can trade below estimated fair value for a long time, so pairing the valuation band with Wave and Chan levels, triggers, and invalidation keeps timing separate from opinion. Neither input works well alone.

Estimates move when the inputs move: earnings reports, guidance changes, interest-rate shifts, or new information about the business. A fair value computed last quarter may already be stale. Revisit the assumptions whenever material news changes the outlook.

Not necessarily. The market can disagree with a model for a long time, and the model itself may be wrong about growth or risk. Stocks trading below estimated fair value are sometimes called value traps for exactly this reason. Treat fair value as context for research, not as a signal.