The Secret to Measuring Value for Companies Like CrowdStrike or Apple
For companies like Apple (NASDAQ: AAPL), measuring its valuation -- the relationship between stock price and earnings per share of stock issued -- is pretty straightforward. The company consistently generates positive earnings each quarter, making it easy to calculate a price-to-earnings ratio -- a financial metric that is often used in determining whether a stock price is a fair value. Apple is a mature company well into its business lifecycle, and has a history that helps in determining its value.
But not all companies are like this.
Some are too young or still ramping up operations and don't have positive earnings yet to measure, which forces investors to seek out other, more creative financial metrics for evaluating whether the company is a good buy or not.
Source Fool.com
