If you don’t have access to a $50k Bloomberg terminal, you can find consensus estimates at Yahoo Finance, Zacks (for revenue and earnings at least), and Koyfin (revenue, earnings, and EBITDA). While your view of earnings potential may differ, it’s good to know what the market expects so you can understand what is built into the price. Valuation metrics are most useful when thinking about the future, and therefore, the metrics we choose for financial valuation should be based on what the consensus expects in terms of earnings, cash flow, etc. I will first mention the five “must-know” ratios that will help you speak the native tongue, and then I’ll touch upon a few esoteric gems in a followup post.Ī quick data note before we dive in. There are also the broader commonplace ratios that help you speak the same language as other investors. Weird ones that subtract all sorts of issues. There are zillions of valuation ratios out there. So generally, investors look at valuation ratios based on estimates of future earnings (or cash flow or revenue or community adjusted magic). the current S&P 500 index of ~18x.Ĭonsiderations like time value of money are important as well - a dollar today is worth more than one 10 years from now. Side note: This is an insanely cheap company and likely has never existed - this would imply a P/E ratio of 0.5x (10/20) vs. So if I pay $10 for a company that expects to earn $20 every year for the next 10 years, that’s empirically a pretty good deal. The point of a valuation analyis is to show the price you are paying for some stream of earnings, revenue, or cash flow (or other financial metric). A valuation ratio formula measures the relationship between the market value of a company or its equity and some fundamental financial metric (e.g., earnings). ![]() That’s why valuation ratios are so important in determining a company’s worth. Sources: CoinDesk (Bitcoin), Kraken (all other cryptocurrencies)Ĭalendars and Economy: 'Actual' numbers are added to the table after economic reports are released.If I offered to sell you my company for $5, would you buy it? Is it worth it? Even though it seems cheap at just $5, if I’m currently a loss-making business, you’re actually paying to lose money. ![]() Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.Ĭryptocurrencies: Cryptocurrency quotes are updated in real-time. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Mutual Funds & ETFs: All of the mutual fund and ETF information contained in this display, with the exception of the current price and price history, was supplied by Lipper, A Refinitiv Company, subject to the following: Copyright © Refinitiv. Data may be intentionally delayed pursuant to supplier requirements. FactSet (a) does not make any express or implied warranties of any kind regarding the data, including, without limitation, any warranty of merchantability or fitness for a particular purpose or use and (b) shall not be liable for any errors, incompleteness, interruption or delay, action taken in reliance on any data, or for any damages resulting therefrom. Source: FactSetĭata are provided 'as is' for informational purposes only and are not intended for trading purposes. Change value during other periods is calculated as the difference between the last trade and the most recent settle. Change value during the period between open outcry settle and the commencement of the next day's trading is calculated as the difference between the last trade and the prior day's settle. Sources: FactSet, Tullett PrebonĬommodities & Futures: Futures prices are delayed at least 10 minutes as per exchange requirements. Sources: FactSet, Tullett PrebonĬurrencies: Currency quotes are updated in real-time. Sources: FactSet, Dow Jonesīonds: Bond quotes are updated in real-time. Sources: FactSet, Dow JonesĮTF Movers: Includes ETFs & ETNs with volume of at least 50,000. Stock Movers: Gainers, decliners and most actives market activity tables are a combination of NYSE, Nasdaq, NYSE American and NYSE Arca listings. Overview page represent trading in all U.S. Indexes: Index quotes may be real-time or delayed as per exchange requirements refer to time stamps for information on any delays. Copyright © FactSet Research Systems Inc. Fundamental company data and analyst estimates provided by FactSet. ![]() International stock quotes are delayed as per exchange requirements. stock quotes reflect trades reported through Nasdaq only comprehensive quotes and volume reflect trading in all markets and are delayed at least 15 minutes.
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