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A chiropractor is a licensed health care professional who supports spine and nervous system health, providing care and rehabilitation to patients. Those who work in this role are typically experts on causes and treatments of back, neck, and shoulder pain.

To become a chiropractor, you need to get a Doctor of Chiropractic degree, which is usually a four-year program (on top of three years of undergraduate study). However, the investment of time and money in your education can pay off in a job that offers high satisfaction and a good salary. The average annual salary for a chiropractor in the U.S. is $91,830, according to latest figures from the Bureau of Labor Statistics (BLS).

If you’re interested in working in the healthcare field and enjoy working with people, a job as a chiropractor may be ideal for you. Read on to learn more about how much money a chiropractor makes, as well as other factors to consider before you decide to jump on this career path.

What Are Chiropractors?

A chiropractor is a type of medical professional who specializes in evaluating and treating a patient’s neuromusculoskeletal system. Their primary duty is to help patients reduce pain and gain greater levels of mobility. They may perform treatments like massage therapy, physical rehabilitation strategies, or spinal adjustments and procedures.

Tasks involved in being a chiropractor typically include:

•   Reviewing a patient’s medical history and listening to their concerns

•   Performing physical examinations to analyze posture, spine, and reflexes

•   Advising patients on health and lifestyle issues, such as exercise and nutrition

•   Providing neuromusculoskeletal therapy, which involves adjusting a patient’s spinal column and other joints

•   Giving additional treatments, such as applying heat or cold to a patient’s injured areas

•   Referring patients to other healthcare professionals if necessary

Chiropractors often work in healthcare clinics, physical therapy centers, yoga studios, massage centers, or gyms. Some open their own private practices. Because the majority of a chiropractor’s day is devoted to patient care, this job is always in-person and is not a good fit for anyone looking for a work-from-home job.

If a chiropractor runs their own practice, they may also have to take on additional responsibilities related to accounting, record keeping, hiring, and managing employees.

How Much Do Chiropractors Make When They Are Starting Out?

Starting salaries for most chiropractors can range anywhere from $74,000 to $98,500, according to ZipRecruiter. However, those in this role can generally expect their income to rise significantly over time.

Starting salaries for chiropractors can range anywhere from $23,000 to $82,000 or higher, per ZipRecruiter. However, those in this role can generally expect their income to rise significantly over time. The highest-earning chiropractors in the U.S. make $110,000 or more a year.

Whether you’re juggling an entry-level salary or one in the six figures, a spending tracker app can help you determine what you can and can’t afford.

What Is the Average Salary for a Chiropractor?

How much you can earn as a chiropractor will vary based on your geographical location, company, years of experience, certifications, and other factors. On average, however, a chiropractor earns an hourly rate of $44. This is the equivalent of around $1,766 per week or $7,652 per month. The average amount a chiropractor earns per year in the U.S. is $91,830.

The Average Chiropractor Salary by State for 2025

How much money a chiropractor makes can vary by location. What follows is a breakdown of how much a chiropractor makes per year, on average, by state (highest to lowest) based on the most recent BLS data.

Chiropractor Job Considerations for Pay & Benefits

On top of their average salary of $91,830, chiropractors earn more once you take their employee benefits into account. Chiropractors who work full time for an employer can expect to gain access to standard employee benefits like healthcare and paid vacation. However, many chiropractors choose to work part-time or are self-employed. Those who are self-employed and run their own practice will need to provide themselves and their employees with benefits.

Pros and Cons of Chiropractor Salary

Becoming a chiropractor requires pursuing years of higher education. Before making that time and financial commitment, it’s a good idea to carefully evaluate both the pros and cons of working as a chiropractor.

Pros of Being a Chiropractor

Here’s a look at some reasons why you might consider becoming a chiropractor:

•   A positive job outlook. According to the U.S. Bureau of Labor Statistics, employment of chiropractors is projected to grow 10% from 2024 to 2034, much faster than the average for all occupations. The government predicts about 5,400 chiropractor job openings a year, on average, over the decade.

•   Ability to help people. Chiropractors help people function better, have less pain, and reach their health goals. This type of work generally comes with high job satisfaction because chiropractors know that what they are doing is meaningful.

•   Job flexibility and autonomy. Compared to other types of healthcare jobs, chiropractors enjoy a high level of autonomy and independence. Many choose to own and operate their own private practices after they graduate. Becoming an entrepreneur gives you the freedom to make your own schedule and work for yourself.

•   Earn a good salary. The national average salary of chiropractors is $91,830 per year, but chiropractors who complete more education and earn special credentials can negotiate for a higher salary, and may earn as much as $100,000 per year. In addition, those in this role may pursue supervisory positions or create their own practice, which can come with higher pay.

Cons of Being a Chiropractor

Being a chiropractor also comes with some downsides. Here are some to keep in mind:

•   A long time in school. Becoming a chiropractor requires completing extensive schooling. Indeed, it can take up to eight years of school and training to become a chiropractor. However, many chiropractic students find the time and effort worth the reward.

•   Working overtime. While some chiropractor positions allow you to work regular, 40-hour weeks, many chiropractors work 50-plus hours per week to see patients, conduct research, and complete paperwork.

•   Risk involved. Some chiropractic procedures involve a patient’s spinal cord and nervous system, such as spinal manipulation and decompression, which can cause pain and involve some risk to the patient. That’s why it’s important that chiropractors have extensive training in conducting these procedures.

•   Salary is lower than other types of doctors. While chiropractors do practice health care, they typically don’t earn as much money as other kinds of doctors. For example, the average national salary for a general physician is $239,200 per year. Keep in mind, though, that it takes more schooling and training to become a general physician.

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The Takeaway

Chiropractors specialize in the anatomy and physiology of people’s nervous systems and spine, and their primary duty is to help patients reduce pain and gain greater levels of mobility.

Choosing to pursue a career path as a chiropractor can be stable and lucrative, with annual salaries as high as $110,000 or more.

Before you can make that much money, however, you’ll need to invest in going to chiropractic school. This may require saving money up over time and/or taking out student loans. Whatever path you choose, learning how to budget and manage your monthly income and expenses can help you reach both your career and your financial goals.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is the highest paying chiropractor job?

Traveling chiropractors and sports team chiropractors tend to earn higher salaries than other chiropractic roles. You can also earn a higher-than-average income as a chiropractor by owning your own practice and employing professionals from other medical disciplines, such as physical therapy, massage therapy, and acupuncture.

Where you work can also have an impact on how much you earn as a chiropractor. The states with the highest average salaries for chiropractors are California, New Jersey, North Carolina, New York, and Alaska.

Do chiropractors make 100K a year?

It’s possible for chiropractors to make $100K a year. In fact, annual salaries for chiropractors can be as high as $110,000 or more.

How much do chiropractors make starting out?

Starting salaries for chiropractors can range anywhere from $23,000 to $82,000. However, a chiropractor’s income typically increases over time. The highest-earning chiropractors in the U.S. make $110,000 or more a year.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q425-032

As long as people rely on indoor plumbing, we will need experienced, skilled plumbers to install, repair, and maintain the systems we use every day. Being a plumber is not only an in-demand job but one that generally pays well. A plumber’s average annual salary in the U.S. is $69,940, according to the Bureau of Labor Statistics (BLS).

A plumber’s expertise spans from diagnosing and repairing leaks in people’s homes to planning commercial piping and municipal sewer systems.

If you enjoy working with both your hands and machinery, have strong attention to detail, and are a good problem-solver, being a plumber might be the right job for you. Read on to learn more about how much plumbers make per hour, how salaries vary by region, and other factors to consider before you decide to pursue a career in plumbing.

What Are Plumbers?

Plumbers are skilled professionals who install, maintain, and repair plumbing systems that supply residential and commercial properties with water and gas and carry away waste. Plumbers play a crucial role in ensuring these systems function properly and efficiently. Their expertise applies both to municipal sewers and single-home septic systems.

Plumbers diagnose and fix various issues related to plumbing systems, such as leaks, clogs, and malfunctions in pipes or fixtures. They also perform routine maintenance to prevent problems and keep plumbing systems in good working order.

In some cases, plumbers are involved in the initial design and planning stages of construction or renovation projects, ensuring that plumbing systems are installed efficiently and meet local building codes and regulations. Some plumbers may specialize in specific areas, such as commercial plumbing, industrial plumbing, or specific types of systems like hydronic heating.

How Much Does a Plumber Make Per Year Starting Out?

A plumber can make a good entry-level salary that continues to increase over time. For example, plumbers with less than one year of experience earn, on average, $47,096, while the average salary for a plumber with more than 10 years of experience is $68,325 per year, per Indeed.

What Is the Average Salary for a Plumber?

Plumbers can earn either an hourly rate or an annual salary, depending on the type of work they do. How much a plumber makes per hour can range anywhere from around $19 to $55. The average hourly pay for a licensed plumber in the U.S. is $33.63 an hour, per the BLS. As mentioned, the current national average for how much a plumber makes a year is $69,940.

How much money a plumber makes can vary by location. What follows is a breakdown of how much plumbers make a year (on average) by state.

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Plumber Job Considerations for Pay & Benefits

Plumbing has become a popular trade because of the various perks and financial advantages that come along with the job. First, the average starting salary of $47,096 is higher than in many industries. Plus, some plumbers are union members, which means that their salaries are protected by a contract and they may receive attractive health insurance and retirement packages.

Learning to be a plumber is also less demanding than obtaining a four-year bachelor’s degree. You can study to be a plumber by attending trade school or technical college. Usually, it takes anywhere between four and 24 months to complete your schooling.

Furthermore, plumbers-in-training typically can become apprentices while they’re completing their education. Apprenticeships let you work and learn simultaneously, meaning you’ll earn competitive pay while you work toward certification. For these reasons, plumbers can often finish their education with little to no student loans.

Plumbing is also a steady profession that will likely always be in demand. Even during economic downturns, residential and commercial buildings won’t stop needing running water and working toilets.

Lastly, plumbers can advance through the ranks to increase their pay and move into new roles. For example, attaining journeyman status often leads to a significant bump in salary. On average, journeyman plumbers earn $69,723, per ZipRecruiter — a $22,627 increase over the average starting salary.

Likewise, you could become a plumbing engineer or a superintendent to manage municipal jobs. Many plumbers also start their own businesses, which could lead to a job that pays $100,000 or more.

Regardless of how much you make as a plumber, a money tracker app can help you keep tabs of where your income is going.

Pros and Cons of a Plumber Salary

As with any profession, there are both advantages and disadvantages to being a plumber. Carefully considering each can assist you in determining if this is the right career for you.

Pros of Being a Plumber

Becoming a plumber can offer several attractive advantages:

•   Job security Plumbing is an essential service that is always in demand. Even during an economic recession, people will always need plumbing services.

•   Good pay Plumbers are well compensated for their expertise from the get-go. With experience and expertise, plumbers can earn a substantial income. Plus, less need for student loans means debt likely won’t erode your earnings.

•   Daily exercise Plumbing work often involves physical tasks such as lifting, bending, and carrying equipment. This aspect of the job provides plumbers with regular physical activity, contributing to a healthier lifestyle.

•   Promotion and business ownership opportunities As a plumber gains experience and expertise, they can ascend the ranks (such as moving from journeyman to master plumber) to increase their pay and access new projects. Additionally, some plumbers choose to start their own businesses, which can be highly profitable and offer independence.

•   Variety during work Plumbers typically encounter a wide range of challenges and tasks on the job. For example, you might replace piping one day and fix a host of leaky faucets the next. This variety can keep the work exciting and engaging.

Recommended: 30 Low-Stress Jobs for Introverts Without a Degree

Cons of Being a Plumber

However, plumbers also face the following challenges:

•   Physically taxing. Plumbing work often requires physical strength and endurance. Plumbers may need to lift heavy equipment, crawl into tight spaces, and crouch for hours on end. These repeated tasks can lead to strain or fatigue.

•   Lack of routine. Plumbing work can be less predictable than some office jobs that follow a set schedule. The unpredictability can be stressful for those who want the same pattern in their work every day or week.

•   Working at all hours. Plumbing issues can arise at any time, including nights, weekends, and holidays. Plumbers may need to be on-call or work during off-hours to address urgent situations. These situations impact work-life balance and require a degree of flexibility in one’s schedule.

•   Risk of injury. Working with plumbing systems and tools can pose certain risks. Plumbers may be exposed to sharp objects, hot surfaces, chemicals, and falling pipes. Additionally, working in confined spaces or at heights can increase the risk of accidents or injuries.

•   High-pressure environment. Addressing leaking sewage and malfunctioning water systems can be stressful and clients may be stressed and difficult to work with. Furthermore, plumbers must navigate unpredictable environments and situations, necessitating the ability to remain composed even in hazardous conditions.

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The Takeaway

Plumbers make a desirable starting salary with plenty of room to advance their careers. They can enjoy the satisfaction of helping others with an essential aspect of life and rest in the fact that the profession isn’t going anywhere.

However, plumbing can impose physical wear and tear, cause injuries, and require work in extreme conditions. The tradeoff for low or no student debt and consistent, lucrative work is the tough physical labor and the possibility of working late hours.

Even after weighing the potential cons, however, you may decide that a trade profession such as plumbing can help you further your professional and financial goals.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is the highest paying plumber job?

The highest paying plumber job is a plumbing engineer, which requires engineering knowledge and project management skills. This position can pay as much as $129,500 annually, according to ZipRecruiter.

Do plumbers make 100K a year?

Plumbers at the highest levels of the profession can make $100,000 per year. Specifically, plumbing engineers (who design plumbing systems for private, public, or commercial buildings) and plumbers who own their own companies can potentially earn six figures a year.

How much do plumbers make starting out?

Plumbers with less than one year of experience earn, on average, $47,096 per year.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SORL-Q425-030

The value of a stock is made up of several factors, including the company’s ability to continue making a profit, its customer base, its financial structure, the economy, political and cultural trends, and how the company fits within the industry. Understanding those basic factors will go a long way toward helping you select stocks for your portfolio.

If you’ve never bought or sold stocks in the past, the thought of trading for the first time might be daunting. But once you’ve done your homework and have developed the right habits, it may not be nearly as intimidating.

Getting Started With Stock Evaluations

Learning how to evaluate stocks starts with some basic homework. But even for those familiar with the stock market basics, it can be helpful to keep some overarching things in mind.

•   When you buy a stock, you’re not simply buying a piece of paper. A stock is an ownership share in a company — you’re buying into that company and its potential performance. When a person invests, they gain an opportunity to join in on its success or failures over the long haul.

•   The more you know about the company, its industry, and general stock market trends, the better. Professional advice is important, but so is trusting common sense.

•   A consumer may be able to spot investing trends that eventually translate to a company’s strong performance down the line, asking questions like: Why am I investing in this company? Why now?

•   It’s important to assess your individual tolerance for risk before investing, and check in on that periodically. Additionally, make time to review your stocks’ performance and watch the market on a regular basis.

•   When considering how many stocks to buy, most investors may want to keep portfolio diversification in mind, with stocks across a range of sectors and risks. Being invested in only one stock means that if the company fails, you could lose your invested money.

Understand the Two Main Types of Stock Analysis

There are two general types of stock analysis: Fundamental, and technical.

Fundamental analysis as it relates to stocks involves analyzing the underlying company’s financial health and operations. It may include looking at financial statements, earnings reports, annual reports, and more, and the overall goal is to get a sense of the stock’s intrinsic value.

Technical analysis, on the other hand, incorporates the use of data and indicators from charts to try and identify patterns and trends. Its goal is to determine where a stock’s value might go next.

Review Stock Materials

With some general evaluation guidelines in mind, the next step is to dig deeper to calculate stock value. This involves reviewing a stock’s materials and documentation.

Balance Sheet and Other Financials

The Securities and Exchange Commission (SEC) requires all public companies to file regular financial documents that disclose their performance. These quarterly filings indicate profit and loss, material issues that can affect performance, expenses, and other key information that will help you gauge a company’s health, and get a better idea of a potential return on equity.

Consumers can find these and other reports on the SEC’s website:

Balance sheet: This records whether the company reduced or increased their debt. Some major items to look for here are the company’s tax paid and tax rate, along with expenses that aren’t related directly to profits, like administrative expenses.

Income statement: The revenue, major expenses, and bottom-line income may reveal trends in the company’s profitability.

Cash flow statement: Not all income is realized, so the cash flow statement shows you what the company actually got paid during the quarter — not what it’s expected to receive from sales 30, 60, or 90 days from now. The operating cash flow (which excludes a windfall or unusual influx of cash) provides a sense of the real, day-to-day (or quarter) activity of the business: how much cash comes in and how much goes out; how the company handles assets and investments; and the money it raises or distributes to lenders and shareholders. Some companies might have meager profits relative to their sales but impressive cash flows.

In particular, as you read through these statements, pay attention to:

•   Revenue: The company’s gross income

•   Operating expenses and non-operating expenses: These are typical day-to-day expenses, and also ones that don’t relate to the core business (for example, a non-operating expense might be any interest paid on debt)

•   Total net income: This is the company’s actual profit, after deducting all expenses from revenue

•   Earnings before interest, taxes, depreciation, and amortization (also known as EBITDA): This figure excludes non-operating expenses

Financial performance ratios offer insight into a company’s financial health.

Form 10-Q

While publicly traded companies tend to release their own financial statements in the form of a presentation for investors, analysts, and the media every three months, they are also required to produce a more comprehensive quarterly report known as the 10-Q, which is filed with the SEC.

This document “includes unaudited financial statements and provides a continuing view of the company’s financial position during the year,” according to the SEC, and can be useful to investors as it provides a comprehensive overview of the company’s performance for the previous three months. The 10-Q also offers insight into other factors that might give an impression of a company’s overall health, including:

•   Any risk factors to the business

•   Information about legal matters

•   Issues that might impact a company’s inventory

Form 10-K

Form 10-K is similar to form 10-Q but it comes out on an annual, as opposed to quarterly, basis. The form is meant to “provide a comprehensive overview of the company’s business and financial condition and includes audited financial statements,” according to the SEC. The annual 10-K can give investors a broader picture of the business through the ups and downs of a year, during which sales and expenses can often fluctuate.

These reports include both detailed financial information and actual writing from the company’s management about how their business is doing. They also outline how executives are paid, which is one more piece of information about the company’s management that can be useful to shareholders.

💡 Quick Tip: Are self-directed brokerage accounts cost efficient? They can be, because they offer the convenience of being able to buy stocks online without using a traditional full-service broker (and the typical broker fees).

How to Value Stocks With Financial Ratios

If learning how to evaluate a stock starts with analyzing financial statements, step two is understanding performance through financial ratios. Ratios offer insight into a company’s financial health, allowing for comparisons to other companies in the same industry or against the overall market.

These are important financial ratios to know.

Price-to-Earnings Ratio (P/E)

This is a stock valuation formula that will help you determine how one company’s stock price compares to another. The price-to-earnings ratio is straightforward: It divides the market price of a company’s stock by the company’s earnings per share. The ratio can reveal how many years it will take for a company to generate enough value to buy back its stock.

Price-to-earnings (PE) ratios can also indicate how much the market expects the company’s profits to grow in the future. When investors buy stocks with a high PE ratio, it typically means they’re “buying” present earnings at a high price, with the expectation that earnings will accelerate going forward. On the other hand, a stock with a low PE ratio could give an investor a good value for their money — but it could also be a sign that investors aren’t confident in the company’s future performance.

Looking back historically, the market has tended to have a PE ratio of about 15, meaning investors pay $15 for every $1 of earnings. But different companies and even different sectors can have wildly different PE ratios.

For example, software companies, especially younger ones, tend to have high PE ratios as investors think there’s a chance they could get much, much larger in the future and turn fast-growing revenue into profits. In software, PE ratios can be in the 30s or even much higher when companies see their stock prices take off quickly, with a PE or around 90.

Earnings Per Share (EPS)

Earnings per share (EPS) tells investors how much earnings each shareholder would receive if the company was liquidated immediately. Investors like to see growing earnings, and rising EPS means the company potentially has more money to distribute to shareholders or to roll back into the business. This figure is calculated by taking net income, subtracting any preferred stock dividends, and dividing the result by the total number of outstanding common stock shares.

Return on Equity (ROE)

Return on equity is a key guide for investors to measure the growth in profit for a company. ROE is determined by dividing the company’s net income by the shareholders’ equity, then multiplying by 100. The ratio tells you the value you would receive as a shareholder should the company liquidate tomorrow. Some investors like to see ROE rising by 10% or more per year, which reflects the performance of the S&P 500.

Debt-to-Equity Ratio (D/E)

The debt-to-equity ratio, determined by dividing total liabilities by total shareholder equity, gives investors an idea of how much the company is relying on debt to fund its operation.

A high debt-to-equity ratio indicates a company that borrows a lot. Whether it’s too high depends on a comparison with other companies in the industry. For example, companies in the tech industry tend to have a D/E ratio of around 2, whereas companies in the financial sector may have D/E ratios of 10.

Debt-to-Asset Ratio (D/A)

A debt-to-asset ratio can be informative when comparing a company’s debt load against that of other companies in the industry. This allows potential investors to better gauge the riskiness of the investment. Too much debt can be a warning sign for investors.

How to Evaluate Stocks With Qualitative Research

It’s important to note that using financial ratios and stock materials to evaluate stocks is a form of quantitative research. Investors can also use qualitative research methods to evaluate stocks, too. That can include intangible value and outside influences.

Intangible Value

Some investors have argued that traditional metrics don’t capture the values of intangible assets a company might hold, like brand power and intellectual property. These have become increasingly important to a company’s worth in more recent years, particularly when it comes to tech stock investing.

For instance, a software company’s patents or intellectual property rights may be incredibly valuable. But on the other hand, it wouldn’t have assets like factories or equipment that are easier to appraise.

Investors should also look at a company’s growth trends, such as at what pace it’s growing its revenue or customer base. Paying attention to “company guidance” — the projections the corporation gives when it releases earnings — can also be helpful in trying to gauge growth.

Outside Influences

Investors can also learn a stock’s beta, or its sensitivity to volatility in the broader market. Some companies are more vulnerable to changes in the domestic or global economy, and others may see their fortunes swing depending on the political party in charge of a government.

Learning a stock’s beta or finding one’s portfolio beta are ways investors can better gauge how much volatility their holdings will experience when there’s turbulence in the broader market.

Pay Attention

Once a potential investor has evaluated a stock they’re hoping to buy by analyzing the company’s financial filings and employing a few stock valuation formulas, there is one last step that can help inform the decision: Paying attention.

There are hundreds, if not thousands, of helpful online news sites and tools to help you research companies, screen stocks, and model a stock’s potential in the future. Here are some viable options.

Financial News Sites: There are numerous financial news sites to read, and you can even try looking at stock market forums to stay on top of things.

Online Financial Tools: Stock screeners help you filter stocks according to the parameters you set, whether you’re looking for blue chip stocks or less-established companies in which to invest.

Company Details: Research more than just the financial facts and figures. Find out how it makes money, the core values of the business, CEO performance, and more. Much information can be gleaned by searching reputable news and business media sites for articles and features about the company and its leaders.

Value Traps

Another common term to be familiar with is value trap — a stock that appears deceptively cheap but is actually not a good pick. Investors who follow the value style of investing tend to be very wary of value traps.

Because while these might seem like bargains, they’re usually not good businesses and may be trading at cheap valuations due to a permanent downhill move or industry changes, rises in costs, or bad management.

Whether a stock is a value trap depends on how the stock performs. If it moves back up to its “intrinsic value” or its true worth, it was indeed a bargain. But if it continues downward or stagnates, the market value was basically a true reflection of its intrinsic value.

The Takeaway

There are a number of key terms, indicators, tools and tips that can help potential investors learn to evaluate a stock and its company’s performance. Investors can review a company’s balance sheets, and forms 10-Q and 10-K to get relevant information about a company’s financial performance and outlook.

Investors looking to evaluate stocks should also be familiar with certain ratios, which can indicate earning potential, debt, and dividend performance, among other indicators that can signal the health of the company and the stock.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

FAQ

What is the difference between price-to-earnings ratio and price-to-sales ratio?

The difference between price-to-earnings ratio and price-to-sales ratio is that P/E ratios compare a company’s share price to its annual profits, and P/S ratios compare share price to annual revenue.

What are some online financial tools that can help me screen and compare stocks?

There are numerous online stock screeners, market simulators, and comparison tools that can be found online, and investors who are interested can try them out to see which they prefer.

How far back should you go when evaluating stocks?

Investors may want to go back a couple of decades when evaluating stocks, as too short of a time frame may not provide enough context, and too much may not prove helpful. But ultimately, it’ll be up to personal preference.

What are some factors that can affect the stock price of a company besides its financial performance?

Stock values can be influenced by any number of factors, including changes to the economy, political changes in a given country, and even things like bad weather.