The industry average is where I look to next to determine where this stock should be in relation to they earnings potential. This company is trading at 6.83 times earnings. The industry and sector averages, respectively, are trading at 64.14 times and 63.11 times earnings. This stock is trading at 1/10th the industry average despite positive earnings and increasing earnings growth.
Given the EPS ratio, if the company were to be trading at .5 the industry average, 30-times EPS, the stock would be trading at $15.00 per share, a nearly 1,000 percent return. Keep in mind that only gets the stock up to half the industry average.
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