7

The EPS of Amazon for the last quarter of 2018 was $6.05. However, the P/E ratio is calculated using an annual number for earnings. Amazon’s earnings for 2018 was $20.14. (Source) $1673 / $20.14 = 83.07


5

Companies with stable, positive earnings that are not expected to grow are not worthless. 0% growth does not imply 0 P/E.


4

I'm not sure I agree with the implication, but I believe he is saying that if EPS grows by 40%, and you find that the current price of the stock has a P/E ratio of 40, then that is "okay and reasonable." Let's say a stock was $10, and had a 10% EPS of $1 per share. Its P/E ratio would be 10. Assuming the EPS grew 40% to $1.4 per share, T. Rowe Price seems ...


2

Fundamentally, the investor must decide how many years to look forward. A company is often valued at some-number-of-years times the current earnings. But, for example, the company has $1 in earnings per-share and a 10% earnings growth and so include the 10% earnings growth by some means: Valued at the current year's earnings along with four-year's forward ...


1

The price per earnings is the price divided by the yearly earnings. The Earnings per Share of quarter 4 should could be a quarter of the total earnings. Add all of the Earnings per share for 4 quarters, and use that as the Earnings.


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