HOW TO ESTIMATE A STOCK PRICE AFTER 5 YEARS π
Simple framework: 1. Take Current EPS Example: βΉ10 2. Estimate EPS Growth Rate Suppose company grows earnings at 15% CAGR. 3. Calculate Future EPS Future EPS after 5 years: βΉ10 Γ (1.15)^5 = ~βΉ20 4. Estimate Future P/E Multiple Suppose fair P/E after 5 years = 25 5. Estimated Share Price Future EPS Γ Future P/E βΉ20 Γ 25 = βΉ500 Thatβs how many long-term investors roughly estimate future stock potential. But remember: β’ High growth sectors usually get higher P/E β’ Mature sectors get lower P/E β’ Cyclical businesses need different assumptions This is NOT guaranteed. Future growth, valuations and market conditions can change. Always calculate based on the companyβs sector, industry structure and business quality.

















