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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.

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    If there was such a thing as being able to accurately determine the price at which you should sell, wouldn't everyone be doing that, creating a self fulfilling proposition? Knowing that price point, short sellers would then come in at that price, driving it back down to where it all began. Wash, rinse, repeat. That's not going to happen because such analysis is based on differing opinions of what metrics are important. That's the reason that you're getting various estimated target prices. – Bob Baerker Feb 11 at 3:14
  • Wasn't what I was asking. I was asking HOW to estimate target prices. Formulas that analysts use to calculate their target prices. – peppy Feb 12 at 7:23
  • Investment banks hire a multitude of quants to analyze every aspect of the companies they follow in order to forecast earnings for the coming years. From that they extrapolate target prices. And even then, they don't get it right. Good luck doing better than they do. – Bob Baerker Feb 12 at 18:09
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In answer to your question, some financial analysts start with a DCF Discounted Cash Flow model.

https://en.wikipedia.org/wiki/Discounted_cash_flow

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.

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Target price = current price*1.1

Many predictions on those websites are not more accurate than this.

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