Stock price is the market price per share at a given time
Use the current bid and ask prices to estimate the trading price
Use the last traded price as the most recent market price
Calculate intrinsic value using discounted cash flow: Stock Price = Present Value of expected future cash flows
Estimate future cash flows from earnings, dividends, or free cash flow
Choose a discount rate based on required return or cost of equity
Use the dividend discount model: Stock Price = Expected Dividend / (Required Return – Dividend Growth Rate)
Use the price-to-earnings method: Stock Price = Earnings per Share × P/E Ratio
Use the price-to-book method: Stock Price = Book Value per Share × P/B Ratio
Use comparable company multiples to estimate a fair stock price
Adjust for dilution by using diluted shares outstanding
Compute market capitalization: Stock Price = Market Capitalization / Shares Outstanding
Compare calculated value with current market price to determine overvaluation or undervaluation