QS Energy Inc (QSEP)

[zerosum]

Sure Whacky, it means a higher stock valuation (translation: stock price) than I was estimating. So, a very conservative stock price estimate based on the earnings would be a 10 P/E (P/E stands for price to earnings ratio), but AISI is saying that he would apply a much higher P/E or "multiple" (The price-earnings ratio is also sometimes known as the "price multiple" or the "earnings multiple") than that to the stock because of QSEP's potential steep growth trajectory.

So, a higher P/E multiple would mean a better price or stock valuation for the company.

I was assuming a 10 P/E, just bc I have been being very conservative as to my estimations as to what the stock could get to. Depending on QSEP's earnings once they start selling and leasing AOT's. But a 20 multiple would be fantastic, that's double my conservative estimate, and AISI thinks even a 20 PE is too low. Stocks can always go higher based on supply and demand, and as you know there is not much stock for sale relative to the outstanding shares.

AISI said:

However, I also believe a PE of 20 is too low. The S&P 500 is currently selling at a trailing 12 months multiple of 24 with declining year over year earnings. A company with explosive earnings potential will command a much higher multiple.

Whacky, some some methods here of calculating the P/E
From investopedia and Wikipedia. I like the Investopedia definition better:

http://www.investopedia.com/terms/p/price-earningsratio.asp

What is the 'Price-Earnings Ratio - P/E Ratio'

The price-earnings ratio (P/E Ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings.

The price-earnings ratio can be calculated as:

Market Value per Share / Earnings per Share

For example, suppose that a company is currently trading at $43 a share and its earnings over the last 12 months were $1.95 per share. The P/E ratio for the stock could then be calculated as 43/1.95, or 22.05.

EPS is most often derived from the last four quarters. This form of the price-earnings ratio is called trailing P/E, which may be calculated by subtracting a company’s share value at the beginning of the 12-month period from its value at the period’s end, adjusting for stock splits if there have been any. Sometimes, price-earnings can also be taken from analysts’ estimates of earnings expected during the next four quarters. This form of price-earnings is also called projected or forward P/E. A third, less common variation uses the sum of the last two actual quarters and the estimates of the next two quarters.

The price-earnings ratio is also sometimes known as the price multiple or the earnings

Wikipedia:
https://en.wikipedia.org/wiki/Stock_valuation

Price to Earnings (P/E)

Now that the analyst has several EPS figures (historical and forecasts), the analyst will be able to look at the most common valuation technique used, the price to earnings ratio, or P/E. To compute this figure, one divides the stock price by the annual EPS figure. For example, if the stock is trading at $10 and the EPS is $0.50, the P/E is 20 times. A complete analysis of the P/E multiple includes a look at the historical and forward ratios.

Historical P/Es are computed by taking the current price divided by the sum of the EPS for the last four quarters, or for the previous year. Historical trends of the P/E should also be considered by viewing a chart of its historical P/E over the last several years (one can find this on most finance sites like Yahoo Finance). Specifically consider what range the P/E has traded in so as to determine whether the current P/E is high or low versus its historical average.

Forward P/Es reflect the future growth of the company into the future. Forward P/Es are computed by taking the current stock price divided by the sum of the EPS estimates for the next four quarters, or for the EPS estimate for next calendar or fiscal year or two.

P/Es change constantly. If there is a large price change in a stock, or if the earnings (EPS) estimates change, the ratio is recomputed.