There are many factors to consider when analyzing stocks. Below, I describe some important things to keep in mind and give specific examples of indicators that you can use.
Financial health
Look at a company's balance sheet and income statement to see if it is financially healthy. Indicators such as the current ratio (assets/liabilities) and the quick ratio (current assets/liabilities) indicate whether a company is able to pay off short-term debt. The current ratio is calculated by dividing current assets by current liabilities. A ratio higher than 1 suggests that the company has enough current assets to cover current liabilities.
For example, Apple Inc. has current assets of $20 billion and current liabilities of $10 billion, then the current ratio is 2 (20/10). If the current ratio of other companies in the same industry is 1.5, then Apple has a relatively strong current ratio.
Growth
Look at a company's growth, both in the short term and in the long term. Indicators such as the revenue growth rate and earnings per share (EPS) growth indicate how fast a company is growing.
For example, If Apple Inc. has earnings of $12 billion and the company has issued 4 billion shares, then the EPS is $12 billion / 4 billion = $3 per share. If the EPS of other companies in the same industry is $2, then Apple has relatively higher earnings per share. This may be an opportunity for investors who believe that the company will earn higher earnings in the future.
Valuation and Industry
Check how valued stock is compared to the company's earnings. The price-to-earnings ratio (P/E ratio) is a popular indicator for this. If a company has a low P/E ratio, this may mean that it is undervalued and offers a good buying opportunity. Keep in mind the industry in which a company operates. Indicators such as the industry P/E ratio indicate how valued a company is compared to other companies in the same industry.
For example: If Apple Inc. has earnings per share (EPS) of $10 and the stock price is $120, then the P/E ratio of Apple Inc. is 12 (120/10). If the industry P/E ratio is 20, then Apple's stock is relatively cheaper than the industry in which the company operates.
Technical analysis
Also, look at charts of the stock to identify patterns and trends that may indicate whether the stock will rise or fall in the short term. Indicators such as moving averages and relative strength index (RSI) can be used for this. The RSI is calculated by dividing the average gain on rising days by the average loss on falling days. An RSI above 70 is considered overbought and an RSI below 30 is considered oversold. An RSI between 30 and 70 is normal.
For example, If Apple's stock has risen 8 times in the last 14 days and fallen 2 times, then the RSI is 70 (8 / (8 + 2) = 0.8). If the RSI of other companies in the same industry is 50, then Apple has a relatively strong RSI.
Keep in mind that no indicator is perfect and that analyzing stocks is a combination of fundamental and technical analysis. It's important to consult various sources and make a well-informed decision before buying or selling stocks.
Note! The examples I provided do not match the current figures for Apple's stock.
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