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Re: RR67 post# 9777

Wednesday, 11/22/2023 10:29:21 AM

Wednesday, November 22, 2023 10:29:21 AM

Post# of 20063
Price per share is often a function of something called the price/earnings ratio.

This is taken from the Charles Schwab website:

“The P/E for a stock is computed by dividing the price of a stock (the "P") by the company's annual earnings per share (the "E"). If a stock is trading at $20 per share and its earnings per share are $1, then the stock has a P/E of 20 ($20/$1). Likewise, if a stock is trading at $20 a share and its earning per share are $2, then the stock is said to be trading at a P/E of 10 ($20/$2).”

So the share price would usually be a multiple of the amount of earnings.

So depending on possible industry averages, rating by the market as a whole of the company and how well it is run, financial management and quality of the management etc etc etc you would expect the share price to be multiple pennies if the earnings were one cent per share.


My post are my opinion only. You should do your own due diligence before investing in any stock or take professional advice. I am not an investment advisor. Kind Regards.

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