GREY:NEVDQ - Post by User
Comment by
westcoast1000on Oct 15, 2021 9:36am
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Post# 34008882
RE:RE:RE:RE:Carap close >>>
RE:RE:RE:RE:Carap close >>>Beezer,
Since Notgnu is going off to salvage copper, maybe I can hazard a response.
The NPV is just what the name says: the present value of net future costs and revenues, calculated at some selected discount rate that represents the opportunity cost of the capital, or what could be made by investing in some generic alternative. The web site Simply Wall St uses this approach to estimate the "fair market value" of a stock by dividing the NPV by the share count.
The multiple approach that Notgnu and virtually all stock analysts use intends to estimate what the share price might be, if one follows standard rules of thumb about multiples of a given financial measure, like FCF, to estimate the share price. The multiples in some sectors are bigger than others, and large cap companies tend to have higher multiples. Some companies have massive share prices even with no net earnings, such as LSPD for example at present. So there is a far wider range of potential share prices to be derived from a given financial metric, depending on assumptions that attemp to infer what investors are willing to pay for a given stock, irrespective of momentum, or NPV or anything other than the metric and the multiple.