Well... You take a PE that is reasonable/fair according to you.
If you think it's 10x, you should take 10x.
Personally, I think Evolution Gaming is a beautiful business and as a result I would be more than happy to buy/own the company at 20x earnings, which is why I choose 20x.
I also find it difficult to find a fair PE or a fair earnings growth for the future because I always think, well I'm biased anyway. So do you have any tips? Should I rely on Analysts estimated values?
"so we state that the stock will trade at 20x earnings in 10 years from now"
But how to predict it? I mean, that PE will be 20x, not 10x, for example?
Well... You take a PE that is reasonable/fair according to you.
If you think it's 10x, you should take 10x.
Personally, I think Evolution Gaming is a beautiful business and as a result I would be more than happy to buy/own the company at 20x earnings, which is why I choose 20x.
I hope this helps!
Kind regards,
QC
I also find it difficult to find a fair PE or a fair earnings growth for the future because I always think, well I'm biased anyway. So do you have any tips? Should I rely on Analysts estimated values?
Hi,
I usually look at 3 things to determine the future growth rate:
- historical growth rates
- outlook of management
- consensus of analysts
It's always very important to use a margin of safety on these numbers as analysts are often way too optimistic for example.