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How do you calculate stock price with only EPS and outstanding shares, and market cap available?

EDIT

sorry forgot to mention, i was trying to get future stock price based on financial guidance of SWIR. They have an estimated eps .04-.11 for q1 2018, and estimated revenue of 181-189 for q1 2018. Now based on current outstanding shares(33136000) and current market cap(689106000), how do i calculate the expected stock price for q1 2018? I don't get how the stock price is currently valued at $16.25...my understanding is it should be ~$20

EDIT

This is how I came to value: ((Expected_EPS * Current_Shares) + Current_MarketCap)/Current_Shares = (($.11 * 35m) + $689m)/35m = $19.76

Is that correct? if so why is the current stock price ~$16.3

EDIT

I just realized to add the expected_eps to current stock price lol...which is about $19.68+.11=$19.79

So again, why is the stock price currently at ~$16.3 instead of $19.79?

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    Why do you assume you can? Price to Earnings ratios can be very different for different market conditions and for different industries. – zeta-band Feb 15 '18 at 20:08
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    EPS is irrelevant, but market cap is number of shares times price per share, so price per share is market cap divided by shares outstanding. – Kevin Feb 15 '18 at 20:37
  • How do you get $20? Total earnings, outstanding shares and market cap are irrelevant. What matters is what P/E ratio you expect since you already have EPS estiamtes – D Stanley Feb 16 '18 at 1:10
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To answer your question: You can’t.

Earnings per share (the metric EPS) is not directly correlated to stock price. EPS is a metric which is often used for benchmarking a stocks performance relative to other similar stocks. These metrics can never stand alone, so you cannot conclude that one stock is performing better than another simply by looking at EPS.

As already described, Market Capitalization (or Market cap in short) is Number of outstanding shares x Stock price. This means that you can then obviously calculate back to stock price with the information you have given us. But you will not get to the expected stock price, you will get to the actual stock price.

Expected stock price (or future stock price) is calculated by taking Net Present Value of ALL future earnings divided by number of shares outstanding. The earnings you are referring is probably the company’s expectations for next fiscal years annual earnings divided by number of shares.

In order for you to calculate the expected price (your expected price - someone else may come to another conclusion), you will need to create a budget for the company in scope, for all eternity and discount the earnings. I practice most analyst will make a budget for maybe 5-10-20 years (depending on industry and expectations) and use an assumption for the “20-infinity” by choosing some sort of expected long term growth.

There are many different methodologies to accomplish this, but among the most popular is the Discounted Cashflow Model (DCF) or Adjusted Present Value (APV) model. However many many more methods exists - but baseline for most are similar.

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Let's break down the three data points you've got first. Let's use the example of Boeing. From Google Finance, I've included the 3 types types of data you're asking about:

Outstanding Shares: 591.04 Million

Outstanding shares are simply how many shares are available for purchase on the market at a given time. You can find this information stated on annual or quarterly balance sheets.

Boeing currently has 591.04 million shares available on the market.

EPS: 11.73

EPS is simply earnings per share. It is calculated by taking the net income (or profit) and dividing by the total amount of outstanding shares. The net income can be found on the income statement, and most companies have EPS listed in their 10-Ks and 10-Qs for investors to look at.

Boeing's twelve trailing month net income is $8,197 million, and had 591.04 million shares outstanding, equalling an EPS of $13.87. This is slightly different than the stated number but rounding on the financial statements, as well as using TTM (trailing twelve months) or most recent annual data can make a difference.

Market Capitalization: $211,570 Million

Market cap is just the share price times the number of shares outstanding. This information is easily computed.

Boeing's stock price is currently $354.86, and with 591.04 million shares outstanding, that means that Boeings market cap is $209,736 million. Again, this differs slightly from what is stated on Google finance but the number depends on which price they are using (moving average, most recent close) and rounding.

And so for your question:

How do you calculate stock price with only EPS and outstanding shares, and market cap available?

You would take the market cap and divide by shares outstanding to give you the price of the share. Like I mentioned above, the price you get may not be current, and could be as old as the last annual or quarterly financial statements. If you are using this to calculate stock price at the time of a financial statement issuing, this would give a good, albeit rough, idea.

I just want to note also, that EPS would not really factor into this at all because EPS can not be "reversed engineered" to find price. and EPS is much more useful when looked at with other companies anyways.

Hope this helps!

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You can try a probablistic aproach. You can download the past price data from Yahoo Finance or Google Finance, run a Monte Carlo Analysis and predict a price based on this data within some range.

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