Earnings-based? Revenue-based? Cash-flow based?
Just to name a few...
Run me through your calculations.
My calculation is simple. Nothing has any value, except money. You only get money from a firm, when they pay a dividend or liquidate.
Thus, the value is the sum of all future dividends plus the final liquidation. (And you must of course account for the time value of money).
The fact that someone will buy it from you, is only true because they are buying the dividend stream. It must come back to the dividend stream.
Revenue based. I think revenue is worthless, except to the extent it represents that you can expect future dividends or liquidation.
Earnings based. Same thing.
Imagine a firm which never paid dividends, and would never liquidate; it just reinvested all earnings. And is accumulating assets and earnings and revenue streams up to wazoo.
In a world where you could not resell the stock, how much would you pay to own this stock? Nothing.
In a world where you could resell the stock, how much would you pay for this stock? Still nothing, since nobody would buy it from you, since there is no inherent value- you will never get anything out of it.
