Could Pfizer Be a Millionaire-Maker Stock?
Over the long term, stock prices follow the ability of a business to generate profits. That can easily be forgotten when fast-growing, money-losing companies are doubling in price as they go public, or climb 100%, 500%, or even 1,000% in a year. The stock prices of these companies can fluctuate wildly because they are based on assumptions about growth with little history to go on, and those assumptions can change rapidly.
For mature businesses that have consistent earnings, like Pfizer (NYSE: PFE), it's easier to estimate how much the company might earn in the future. Using its long history, we can even come up with a range of possible stock prices years from now and whether the implied returns would make it a good investment.
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Source Fool.com
