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 ...


3

The financial system we have relies on a system of checks and balances intended to prevent manipulation / fraud from occurring. The primary way this is done, is through the requirement that public stock exchanges have, for companies to obtain a 3rd party audit of their financial results. If you open the financial report of any public company, at the front ...


3

To elaborate, imagine a hypothetical scenario in which they calculate the earnings for a certain quarter before a higher consensus earnings estimate comes out. Do they consider bumping up their earnings a little bit to match the consensus estimate, and then do the offsetting adjustment in one of the subsequent quarters hoping that it will be better? Or if ...


2

NVIDIA reported both GAAP (Generally Accepted Accounting Principles) and non-GAAP earnings amounts at the end of their Q3. Their GAAP EPS was 2.12, but their non-GAAP EPS was 2.91. Different sites apparently use different values. I can't reconcile the values that Nasdaq uses. It's possible that their data hasn't fully incorporated the reported results since ...


2

Companies can manipulate earnings. There is illegal manipulation (i.e. fraud) and somewhat legal manipulation. Some of this somewhat legal manipulation is called "income smoothing" and "earnings management". Earnings management requires competent accountants. You may be interested in reading The "Numbers Game", a 1998 speech by ...


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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