Market capitalization, or market cap, is the total market value of a company’s shares. It’s calculated by multiplying the current share price by the total number of shares outstanding (Market Cap = Share Price × Number of Shares). This number shows how much investors think the entire company is worth right now on the stock market, it’s basically the company’s price tag.
However, the market cap only reflects the current market price, which can move daily with investor sentiment, news, or market trends. It doesn’t always represent the company’s real or intrinsic value. What it is truly worth is based on fundamentals like profits, cash flow, assets, and long-term growth prospects.
The real (intrinsic) valuation is an estimate of a company’s genuine worth, calculated from its financial performance and business outlook, rather than what investors are currently paying for it.