how to value a stock?

[msurkan]

Does anyone have any general tips on estimating proper valuations for stocks? In particular, I would like to find a way to calculate what the earnings per share, and revenue, would need to be for a given stock price to be justified. If it turns out, for example, that a given firm would have to be bigger than the entire industry it is in for it's stock price to make sense, then that would indicate the stock was over-valued.

Are there any on-line resources that already show these types of stock value calculations?

Thanks,
Mikhail

[nodoodahs]

In a perpetual growth model, the discount rate and the growth rate form the denominator. Hence, the closer the discount rate and growth rate are, the higher the justified PE ratio is.

When they are equal, a PE ratio of infinity is suggested ....

When the growth rate to infinity is higher than the discount rate, you have a negative denominator and a negative PE justified, which means basically that the formula doesn't make sense in that instance.

These calculators are where two things happen.

First, rational investors use these to make cautious, real-life estimations of what they think a stock is worth. Some of us will even chose to buy only if the PE is well below our targets ...

Second, Wall Street analysts will plug different growth and discount numbers into these calculators to come up with rationalizations behind the "buy" recommendation that their managers tell them they need to make ...
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[msurkan]

[nodoodahs]

Try this ...

http://www.moneychimp.com/articles/valuation/stockvalue.htm

Off-color joke about being worth what some people pay was typed and deleted. Email or PM me for joke.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.