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Undervaluation: meaning, definitions and examples

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undervaluation

 

[ ˈʌndərvæljuˈeɪʃən ]

Noun
Context #1 | Noun

in finance

The action or fact of undervaluing something, especially a company or asset, in terms of its worth.

Synonyms

devaluation, underestimation, underpricing.

Which Synonym Should You Choose?

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Word Description / Examples
undervaluation

This term is usually used in finance to describe a situation where the market price of an asset or company is believed to be lower than its true or intrinsic value.

  • The undervaluation of tech stocks presents a good opportunity for investors.
  • Some economists argue that the current undervaluation of the currency is deliberate.
underestimation

Use this term when referring to the act of assessing something as weaker, smaller, worse, or less important than it actually is. It applies to both tangible and intangible things.

  • There was a clear underestimation of the project's complexity.
  • His underestimation of her abilities cost him the promotion.
devaluation

This word is specifically used in the context of currency to indicate a deliberate reduction in the value of a currency relative to others, often for economic policy reasons.

  • The devaluation of the national currency led to increased exports.
  • The government announced a 10% devaluation to combat the trade deficit.
underpricing

This term typically relates to setting the price of a product, service, or security lower than its actual market value, often intentionally or due to misjudgments.

  • The underpricing of the initial public offering led to a rapid increase in stock prices.
  • Underpricing your products might bring customers in the short term but can hurt profitability.

Examples of usage

  • The undervaluation of the company led to a hostile takeover bid.
  • Investors saw the undervaluation of the stock as an opportunity to buy low.

Translations

Translations of the word "undervaluation" in other languages:

🇵🇹 subvalorização

🇮🇳 अवमूल्यन

🇩🇪 Unterbewertung

🇮🇩 penilaian rendah

🇺🇦 недооцінка

🇵🇱 niedowartościowanie

🇯🇵 過小評価 (kashōhyōka)

🇫🇷 sous-évaluation

🇪🇸 subvaluación

🇹🇷 değerinin altında değerlendirme

🇰🇷 저평가 (jeopyeong-ga)

🇸🇦 التقليل من القيمة

🇨🇿 podhodnocení

🇸🇰 podhodnotenie

🇨🇳 低估 (dīgū)

🇸🇮 podcenjevanje

🇮🇸 vanmat

🇰🇿 бағаланбау

🇬🇪 დაუფასებლობა

🇦🇿 dəyərindən aşağı qiymətləndirmə

🇲🇽 subvaluación

Etymology

The term 'undervaluation' originates from the verb 'undervalue', which has been in use since the late 16th century. The prefix 'under-' indicates a lack or insufficiency, while 'value' refers to the worth or importance of something. In the context of finance, undervaluation often leads to discrepancies between perceived and actual worth, influencing investment decisions and market dynamics.

See also: devaluation, devalue, evaluable, invaluable, overvaluation, overvalue, overvalued, revaluation, undervalue, undervalued, unvaluable, unvalued, valuable, valuables, valuation, valuator, valued, valueless, values, valuing.

Word Frequency Rank

This word's position of #31,537 indicates it's among the more rare English words. While understanding it broadens your vocabulary, focus on more common words first.