As jw said, Youtube is an excellent resource if used correctly, theres an abundance of information on there (who doesnt love going down the youtube rabbit hole). It got me through my engineering degree. One thing to be wary of is the amount of garbage on there from self proclaimed experts, maybe not so much around the valuation method side of things but be careful of getting "stock tips" from youtube.

In terms of valuation there's more than one way to get to the same result. Some people like DCF's (discounted cash flows) but these are only as good as the data you put in. I do like DCF's because they act as a promt to think about the different financial metrics as you forecast out into the future. Others will simply look at P/E ratios or P/S (Price to Earnings or Price to Sales) and forecast future earnings, earnings growth and derive a future multiple to arrive at a price you're willing to pay today.

There's many more ways to value a company and neither method is the right or wrong way to do so. Try out a few different methods on the same company and see which fits your style best. I certainly learn best by doing.

@Jackrabbit181

There is some great advice in the previous replies. I found 'Valuable' by Roger Montgomery a good read.

 I think it is important to remember that whichever method you use to work out your valuations, it is only a model and it is only as reliable as the information you put into it (ie. BS in equals BS out).  A famous statistician, George Box, once said "All models are wrong, but some are useful". The aphorism recognses that statistical or scientific models always fall short of the complexities of reality but can still be of use.

Having said that, valuation models are far better than hope! Have fun! :)

Hi Jackrabbit,

With regards to tools for valuing companies I'm not sure these would be of much use. SimplyWallSt has one but if everyone is using the same generic valuation tools I'm not sure you're going to be able to gain an edge. One of the unique aspects to performing your own DCF valuation is that you can play around with different levers in your model to see how they affect the intrinsic value (IV). For example, how does halving or doubling staff costs affect the IV or will the company be able to charge more for their product and if so what affect does this have on valuation? From my limited experience, a valuation is much more accurate the better you understand the company; which could be an argument against using valuation tools.

If you'd like to learn how to value companies beyond ratios such as price to sales, price to earnings, price to recurring revenue etc I'd recommend learning how to perform a discounted cash flow analysis (DCF). There are a few resources that will teach you how to do this.

Rask education has a free valuation course that is very useful. It's aimed at an intermediate level and can be found here:

https://education.rask.com.au/courses/valuation-course/

Corporate finance institute goes into this as part of their FMVA program. You could pay for the whole program or just for the Business Valuation Modelling parts I and II. When I started investing a little over a year ago I had zero knowledge (I didn't even know what a cash flow statement was) and found this course appropriate for a beginner level if you're willing to commit 100+hrs to complete it.

https://corporatefinanceinstitute.com/certifications/financial-modeling-valuation-analyst-fmva-program/

Aswath Damodaran has a course on valuation as well. Personally I struggled with this course and never completed it but I'd encourage you to check it out nonetheless.

A few other resources that touch on valuation:

When Entry Multiples Don't Matter https://a16z.com/2020/08/17/role-of-entry-multiples-in-valuations/

The Dangers of a DCF - James Montier (you'll have to google this one)

Catapult International Group Ltd (ASX: CAT) - Australian Investors Podcast has some great tips on valuing companies outside of a DCF (although it sounds like this isn't what you're looking for)

Pat Dorsey Returns - The Moat Portfolio - Invest Like the Best Podcast

When Does Valuation Matter? The 7investing Podcast

Hope that helps

For those who are starting out on their retail investing journey (or just want to brush up their skills) - and have longer pockets than arms - I would recommend this website.  It even includes end of session tests to check your understanding.

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/webcastinvphil.htm