Hi Timmy,
There are various models for valuing a domain. Unfortunately there are a few people who use these "automated systems" which (as you have discovered) have no basis in fact.
The method of comparables is what we use. These principles are also used in realestate and in the stock market. For the record, that's also why we publish the historical sales figures on Domainer Income (its 100% free). So if you want to sell a domain, you can check what other, similar domains have previously sold for. The same applies to buying.
Hope that helps.