I'm looking at various stocks on finance websites and noticed that some of them don't have a 1-year Target price. How can I calculate estimated target price of a stock myself based on the company's fundamentals/analysis, PE ratios, and other variables? I'm looking for a number of different formulas that can give me various estimated target prices.
In answer to your question, some financial analysts start with a DCF Discounted Cash Flow model.
It sounds like the company has no financial analysts covering them.
Another formula that's good to understand is NPV Net Present Value.
That said, I've only tried doing my own DCF analysis a couple of times just to gain an intuitive understanding of the concepts. The exercise took me several days of work. When I listen to corporate earnings calls or read their transcripts, many companies provide a "financial model" to the analysts that cover the company. (Companies do not make these models publicly available.) Maybe shoot a quick email to investor relations asking for a model.
At the very least, they should be able to provide you with a few pie-in-the-sky numbers.
- total addressable market size for existing product/service
- total addressable market size for future product/service
- a long term pie-in-the-sky goal for Gross Margin and Net Margin
You could then plug these numbers into a DCF model, comparing it to the "risk-free interest rate of return".
There's a 5% chance they will reply to your email, and if they do, it will say we can't tell you anything.
Target price = current price*1.1
Many predictions on those websites are not more accurate than this.