If you are forecasting a company to go backwards in NPAT from $38m last year to $21m, then a 20x PE ratio is not appropriate. Market PE is around 16, growth stocks are 20-25. If they are going backwards, PE may be 10 until they prove they are out of the woods financially. Which means a fair value of $2 - $2.50 if your numbers are true
If you are forecasting a company to go backwards in NPAT from...
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