Select two publicly traded companies from two different industries and discuss how you would value the stock of those co...
Select two publicly traded companies from two different industries and discuss how you would value the stock of those companies. Are your selected stocks overpriced or underpriced by the market?
Homework Answers
We have selected Apple Inc. in manufacturing industry and Amazon.com Inc. in service industry :
Basis of valuation is PE and Formula use is Price = PE * EPS
| Apple Inc. | |
| Past PE | 14.92 |
| EPS | 12.01 |
| expected price | 179.1892 |
| current price | 178.3 |
| valuation | Fairly-priced |
| Amazon.com Inc. | |
| Past PE | 75.96 |
| EPS | 20.14 |
| expected price | 1529.8344 |
| current price | 1816.32 |
| valuation | Over-priced |
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