Growth Priced Into a Stock
How do you guys calculate growth priced into a stock?
Do you just model out EPS (say 5-years), apply a terminal multiple, discount the terminal price back using the cost of capital, then find the growth rate that makes the model price equal the current stock price?
I work in PWM so I don’t do much of this on a daily basis; just wanna know how the pros do it… ;)
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