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Earnings per share (EPS) measures the amount of total profit earned per outstanding share of common stock in a specific period, usually either a quarter or a year.
For the final category, let's briefly examine valuation using the price-to-earnings (P/E) ratio-- which compares a company's market price to its trailing 12 months of earnings per share (EPS ...
The changes have culminated in a significant increase in Amazon's profits. ... the stock trades at a price-to-earnings (P/E) ratio of 50. ... which places the stock at a forward P/E ratio of just ...
The price earnings ratio (P/E) of each identified peer company can be calculated as long as they are profitable. The P/E is calculated as: P/E = Current stock price / (Net profit / Weighted average number of shares) Particular attention is paid to companies with P/E ratios substantially higher or lower than the peer group.
When the dividend payout ratio is the same, the dividend growth rate is equal to the earnings growth rate. Earnings growth rate is a key value that is needed when the Discounted cash flow model, or the Gordon's model is used for stock valuation. The present value is given by:
Options and warrants are converted at pre-defined rates. As the stock price increases, their value increases dollar-for-dollar. If the stock is valued at a stable price-to-earnings ratio (P/E) it can be predicted that the options' rate of increase in value will be 20 times (when P/E=20) the rate of increase in earnings. The calculation of "what ...