Monday, March 4, 2019

WSJ: What Is Implied Earnings Growth?

By SIMON CONSTABLE

Investors may start hearing more about “implied earnings growth.” It is a metric that can help people make investment decisions, and it is especially relevant during times of market tumult when stocks frequently get mispriced.

Whenever analysts value securities, they make assumptions about the growth of the company. Faster-growing firms generally warrant higher valuations than those likely to see only modest profit increases, other things being equal. Read more here.

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