For example, the market has historically been willing to pay 4.5x to 6.7x multiples of cash earnings, but at the current price the stock trades at a price-to-cash earnings of 7.3x.
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In the late 1990s, Yale professor Robert Shiller examined the usefulness of price-earnings ratios (price divided by earnings per share) as predictors of future stock market performance.
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Among its plethora of distractions are depressed earnings and stock price, high-level executive turnover and a possible takeover attempt led by company founder Richard Schulze.
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With the stock trading just below the low levels of historical price-to-cash earnings and price-to-sales ranges, we continue to believe the stock is Undervalued.
Each of these companies trades at a discount to the stock market's trailing 12-month price-earnings ratio of 15, yet is expected to increase its earnings per share over the next two years.
So study charts of earnings yield (earnings per share divided by stock price) versus dividend yield (dividends divided by stock price).
Most value investors analyze companies based on their current financial performances, as measured by the stock price as a multiple of earnings or book value.
The question now for investors is whether Kors can continue that kind of growth in both stock price and earnings, justifying its PE ratio for the trailing 12 months, which currently stands at nearly 40.
For instance, historically the market has been willing to pay between 6.6x and 14.7x times cash earnings per share for Halliburton, but the stock currently trades uncomfortably close to the high end of that range at price-to-cash earnings of 13.8x.
Best Buy released its thirdrd quarter earnings and the market promptly lopped 15% off of its stock price.
The stock trades at a price-earnings multiple of 13.
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Wendy's is the cheaper stock with a price-to-earnings ratio of 17.15 compared with 21.36 for McDonald's.
Based on estimates for the coming 12 months, the stock carries a price-to-earnings ratio of 16.
Genentech stock goes for a price of 74 times earnings per share versus 38 times for Amgen.
As for comparisons with the competition, the stock's price-to-earnings ratio of 18, based on estimates for earnings in the coming 12 months, looks pricier than military contractors competitors like L-3 Communications Holdings or Northrop Grumman.
So the biggest chance for an increase in Tiffany stock price would be the result of a positive earnings surprise.
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In each of these cases, too, though, the Sorrell decision may prove just a smallish tree in the forest of considerations bearing on earnings and, in the end, on stock price or dividend stream.
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The stock is now trading at a robust price to earnings ratio of 70.
Increased costs will hit earnings, which will snag the stock price, further dampening the morale of those 60-hour-a-week Gatesians who slave away for stock options.
For a company sitting on the biggest oil find in the Americas in the last decade, this is what the market thinks about Petrobras: After better than expected fourth quarter earnings, but worse than expected year enders, the share price of this stock was down 7.5 percent at noon in New York on Tuesday.
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Thus, despite a non-GAAP gross operating margin of 48.1%, IBM suffered a horrible post-earnings stock price drop.
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Despite its recent stock slump, Opnet's price-to-earnings ratio of 41, based on profit estimates for the coming 12 months, still looks rich.
Based on assumptions of 20% growth annualized over the next five years, the stock trades at a svelte price-to-earnings growth ratio of 0.3 that would make legendary investor Benjamin Graham himself drool.
The resulting stock price is what Callahan considers the intrinsic value of those future earnings.
Strong margins drove ExxonMobil's second-quarter earnings ahead of The Street's expectations, lifting the oil firm's languishing stock price.
Perficiennt is up 121% in the past year, but considering the company's rapid growth, the stock looks reasonably cheap with a price-to-earnings growth ratio of 0.86.
The stock closed down fractionally despite the earnings beat most likely because of declines in the price of crude oil, which applied pressure to the entire sector.
The company has said it will have to restate several years worth of revenues and delay this year's quarterly earnings reports, all while watching its stock price plummet.
The stock has traded below its historically normal levels of price-to-cash earnings and price-to-sales during this time.
Companies buy back stock for a variety of reasons from earnings-per-share enhancement to lack of share price growth.
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