Yahoo yahoo.com 06 Aug, 2022 14:45 am

Is the Market Following Fundamentals?

Is the Market Following Fundamentals?
Most readers would already be aware that Teradyne's (NASDAQ:TER) stock increased significantly by 15% over the past...

Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential.Earnings growth is a huge factor in stock valuation.What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price.Unsurprisingly, this has led to an impressive earnings growth.

That being so, a study of the latest analyst forecasts show that the company is expected to see a slowdown in its future earnings growth.Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested.

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