Penny Stock Valuation Calculator Tool
- Choose a Stock
- Get Current Share Price, # of Outstanding Shares, and Yearly Net Income (Net Profit) from OTC Markets Website
- Get Industry Average P/E ratio from Yahoo Finance Site (Choose the industry that best matches the stock’s business model)
- Fill out the first 4 fields in the tool below and get the “Fair Value” Price Per Share
- This tool only works for companies with positive net incomes
- This is only one method for valuation and the “Fair Value” Price Per Share will not always be reached
- This valuation method only accounts for profitability and ignores factors such as assets and liabilities. Make sure to look at that data as well
- The method behind this valuation tactic is fully explained in this post
- If you want to use this tool to account for growth, enter a higher value in the Net Income field
- You can use this tool to determine how new deals should affect a company’s share price. For example, if a company has a deal that will bring in $5 million in net profit, plug that into the equation. The “Fair Value” Price Per Share field will indicate how much value should be added to the price-per-share because of the deal.
- You can use this tool to test the effects of reverse splits, splits, share buybacks/retirements, etc. Just change the number of shares in the “# of Outstanding Shares” field.
- If you are struggling to choose which industry your stock is in, you can go to Yahoo Finance, enter your stock, and click on the “Profile” link under the Company tab to see which industry Yahoo Finance classifies the stock as.