INSTANT CALCULATIONS
OF A STOCK’S POTENTIAL PAYBACK PERIOD (PPP)
AND INTERNAL RATE OF RETURN (IRR)
GENERAL FORMULAS FOR STOCKS WITH MEANINGFUL P/E RATIOS (when EPS > 0)
INSTANT CALCULATIONS FOR STOCKS WITH MEANINGFUL P/E RATIOS (when EPS > 0)
| Companies |
Price Earnings Ratio (multiple) |
EPS Growth Rate (in %) |
Interest Rate (in %) |
Potential Payback Period (PPP) (in years) |
Internal Rate of Return (IRR) (in %) |
|---|---|---|---|---|---|
| Example | 27 | 18 % | 4 % | 12.14 | 5.87 % |
| Nvidia |
77.8 | 50 % | 4.14 % | 9.71 | 7.40 % |
| Company X | - | -% | |||
| Company Y | - | -% |
(1) Data as of January 21, 2024
SPECIAL FORMULAS FOR STOCKS WITH NO MEANINGFUL P/E RATIOS (when EPS < 0 or EPS ≃ 0)
INSTANT CALCULATIONS FOR STOCKS WITH NO MEANINGFUL P/E RATIOS (when EPS < 0 or EPS ≃ 0)
Data as of January 21, 2024
| Companies | Price | EPS 2023 | EPS 2024 | EPS 2025 | g | r | PPP | IRR |
|---|---|---|---|---|---|---|---|---|
| Example | 100 | -10 | 0 | 10 | 8 % | 2.00 % | 11.01 | 6.50 % |
| MICRON TECH. | 87.51 | -0.43 | 6.59 | 8.10 | 15 % | 4.14 % | 9.67 | 7.43 % |
| Another company | % | % | - | -% |
Price = Share price today
EPS 2023 = Earnings Per Share (EPS) for the current year (year 0)
EPS 2024 = Earnings Per Share (EPS) for next year (year 1)
EPS 2025 = Earnings Per Share (EPS) for the following year (year 2)
g = EPS growth rate (in %) starting year 2
r = Interest rate (in %) today
PPP = Potential Payback Period
IRR = Internal Rate of Return