Future Analysis

The Future Analysis tab of the Portfolio Analyzer helps investors assess the potential impact of P/S and P/E compression on a stock’s future price. Many stocks trade at valuation multiples that fluctuate over time, and this tool projects what could happen if those ratios return to their historical norms.

The top section summarizes the key findings, highlighting whether the current valuation is sustainable. Below, detailed sections break down the methodology, comparing the selected company’s current P/S and P/E ratios to its past averages and industry benchmarks.

These models estimate potential price changes based on different valuation scenarios, helping investors make more data-driven decisions about risk and return expectations.

The Future Scenario Analysis summary provides a high-level assessment of whether a stock’s current valuation is sustainable based on historical comparisons.

  • The color gradient and letter rating on the left indicate the overall risk level, with red representing higher risk and green signaling lower risk.
  • The text block on the right explains key insights, highlighting whether the stock’s Price-to-Sales (P/S) and Price-to-Earnings (P/E) ratios are significantly above historical norms and the potential downside if they revert.

This section serves as a quick reference for investors to gauge the likelihood of future price declines or gains before diving into the detailed projections below.

The Current Financials section provides a snapshot of key financial metrics, including price, market cap, revenue, net income, P/S ratio, P/E ratio, revenue growth, and profit margin.

Users can start by reviewing these figures to understand the stock’s current valuation and performance. Keeping these numbers in mind will help when comparing them to the historical benchmarks and future projections in the sections below, allowing for a more informed assessment of potential valuation changes and risks.

The Median Comparison Rating section helps investors understand how the selected company’s current Price-to-Sales (P/S) and Price-to-Earnings (P/E) ratios compare to both its historical averages and industry benchmarks.

  • The summary table provides percentage differences, indicating how much higher or lower the current valuation is relative to past company medians and industry norms.
  • The detailed table below presents the actual numerical values for a deeper comparison, showing how the company’s current valuation stacks up against its 5-year and 10-year median P/S and P/E ratios, as well as those of the broader industry.
  • The letter grade in the green header reflects how these differences impact overall investment risk, helping users quickly gauge whether the stock is trading at an inflated or reasonable valuation based on historical trends.

The Future P/S Projection Rating estimates how the stock’s price might change over the next three years if its Price-to-Sales (P/S) ratio returns to historical norms.

The summary table (depicted to the right) provides a quick view of the projected P/S ratio and expected percentage price return, assigning a letter grade based on potential risk.

The detailed table below breaks down the calculations step by step, showing how ERS models the impact of revenue growth and market cap adjustments on future stock price. Users can follow each row from left to right to see how future revenue, market cap, and share price projections influence the expected gain or loss.

The table columns represent the following calculations:

  • Future P/S Ratio – The projected P/S if it reverts to its historical median or the industry median.
  • Future Revenue Growth – Estimated based on the company’s current growth rate or a more conservative assumption.
  • Future Revenue – Projected total revenue in three years if it grows at the given rate.
  • Future Market Cap – Calculated by multiplying future revenue by the future P/S ratio.
  • Future Price – The estimated stock price in three years, based on the future market cap divided by the current number of shares outstanding.
  • Price Gain (Loss) – The projected percentage increase or decrease in stock price compared to its current price.

The Future P/E Projection Rating estimates how the stock’s price might change over the next three years if its Price-to-Earnings (P/E) ratio returns to historical norms.

The summary table (depicted to the right) provides a quick look at the projected future P/E ratio and expected percentage return, assigning a letter grade based on the potential risk or reward.

The detailed table below outlines the step-by-step calculations ERS uses to project the stock’s potential price changes under different valuation scenarios. Investors can follow each row from left to right to see how future revenue growth, profit margins, and net income impact the company’s expected market cap and stock price.

The table columns represent the following calculations:

  • Future P/E Ratio – The projected P/E if it reverts to its historical median or the industry median.
  • Future Revenue Growth – Estimated based on the company’s current growth rate or a more conservative assumption.
  • Future Revenue – Projected total revenue in three years if it grows at the given rate.
  • Future Profit Margin – Assumed profit margin based on current levels or a more conservative estimate.
  • Future Net Income – Future revenue multiplied by the future profit margin.
  • Future Market Cap – Calculated by multiplying future net income by the future P/E ratio.
  • Future Price – The estimated stock price in three years, based on the future market cap divided by the current number of shares outstanding.
  • Price Gain (Loss) – The projected percentage increase or decrease in stock price compared to its current price.