Dec 23, 2019
Watching financial media, you hear terms like PE and Forward PE multiples, revenue, margins expanding or contracting, and share buybacks. So, what does it mean for a stocks price when multiples increase or decrease? What is the attribution for earnings increasing or decreasing? How do you calculate net profit margin? Earnings releases can be more complicated than they need to be. In this episode, Derek Moore explains scenarios in detail so you can gain a better understanding of all these terms and what it means for stock valuations and earnings growth.
How to calculate the market cap of a stock
How to calculate the earnings per share (EPS)
How to calculate the PE Price to Earnings Ratio
Using net income and revenue to figure out the net profit margin
Difference between multiple expansion and earnings growth for stock prices
What are key determinants of a stock’s earnings (Revenue, Margins, Share Buybacks or Issuance)
How share buybacks effect earnings per share
Difference between market cap and net income versus per share earnings
How earnings per share can growth with changes in share count, revenue, and net profit margins
What is a PE ratio?
What is net profit margin?
What is a stock’s market cap?
Mentioned in this Episode:
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek www.razorwealth.com
J.P. Morgan’s Guide to the markets https://am.jpmorgan.com/us/en/asset-management/gim/protected/adv/insights/guide-to-the-markets