I also thought of another more academic answer for a response in general to declining earnings
Take the (long term .... so 5Y) stock beta times the Market Premium then add Risk Free Rate and the CAGR decline in earnings
From Yahoo Finance, 5Y Beta for CXO = 1.69
ASX avg Market Premium of ~6%
Aust 10Y Bond Rate as proxy for Risk Free Rate = 3.4%
Model has a EBITDA declining at ~ 9% YoY
This calculates a growth-adjusted cost of equity = (1.69 x 6) + 3.4% + 9% = 22.25% = Forward P/E = 4.5 x
How's that sit with what you are thinking?
Oh No - Another Valuation Thread!, page-19
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Last
8.3¢ |
Change
-0.008(8.79%) |
Mkt cap ! $177.3M | |||
| Open | High | Low | Value | Volume |
| 9.0¢ | 9.0¢ | 8.3¢ | $4.722M | 56.06M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 3 | 1606055 | 8.3¢ |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| 8.6¢ | 110070 | 6 |
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| Last trade - 16.10pm 21/06/2024 (20 minute delay) ? |
| CXO (ASX) Chart |