When investing in a stock, your goal should be to pay a price that's less than the value of the company's future profits.
Unfortunately, predicting any company's future profits and future growth with accuracy is easier said than done. After all, if we had a crystal ball to predict the future revenue and earnings of every publicly traded company, getting rich would be easy!
So, we use the next best thing when investing in the stock market: analyzing stocks.
Source Fool.com