Relative valuation—using simple metrics to compare a firm’s value to its peers—is a cornerstone of financial decision-making. If a company earns $2 billion in profit, and if similar firms trade at 15 ...

The price-earnings (P/E) ratio, or earnings multiple, is one of the most popular measures of company value. It is computed by dividing the current stock price by earnings per share (EPS) for the most ...

I emphasize a nuanced approach to valuations, recommending different Owner's Yields based on expected revenue growth rates, rather than a flat 4% threshold. For example, companies with 10% revenue ...

One of the most often used metrics for determining a company’s worth is the price-earnings (P/E) ratio, also known as the earnings multiple. It is calculated by dividing the current stock price by the ...