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GameStop Corp. Message Board

  • pivotpoint777 pivotpoint777 Dec 3, 2007 2:54 PM Flag

    GME: 2008 Target Price $81 (+42%)

    GME: 2008 Target Price $81 (+42%)

    It's a good idea to estimate future price targets on stocks
    to help you see what the potential for the stock really is.
    Here's how I do it.

    First, take the current P-E and multiply it by the next full
    year's EPS estimate. This will give you the preliminary
    target price.

    Then average the last four quarters earnings surprises. This
    will give you the average percentage that the stock beats
    (or misses) earnings estimates. You can find all this
    information at Yahoo Finance.

    Next, multiply average earnings surprise by next years EPS
    estimate. Finally add this figure to next years EPS estimate
    and multiply by the current P-E. This will give you next
    full year's estimated price target.

    (C) 2008 EPS ESTIMATE
    (D) TARGET PRICE (preliminary)
    (F) 2008 TARGET PRICE
    (G) 2008 Est. Gain/Loss (%)

    Formulas: D= (B x C) F= ((C + (E x C)) x B) G= ((F - A) / A)

    Remember, this is only a guideline and anything can happen
    in the stock market. But I've found that having a target price
    in mind has given me the confidence to stay aboard a winning stock
    and not get shaken out during normal corrections.

    As legendary stock trader Jesse Livermore put it; "The big money
    is made by the sittin'and the waitin,'not the thinking." One of
    the things that great traders like Livermore, O'Neil, Baruch,
    Darvas, and Loeb have in common is their ability to "let their
    profits run" by staying with a strong stock for the majority of
    it's big move.

    Get more of my daily stock and market analysis on the web at:

    Mark Gordon
    Chief Market Strategist

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