How do you calculate the value price of a stock- with its new or estimated earnings?

[Utopia]

[Mr. Q]

The market determines the value, constantly changing depending on industry, future earnings, interest rates, and so many varying factors.

[Ron]

If you are just looking for the current value, you use the existing earnings times the P/E ratio. If new estimated earnings come out, you can determine whether you want to buy the stock or sell it. If the earnings come in above what they currently are and the earnings times P/E is lower than the current market value, it might be a good time to buy the stock.

Ron, ChFC

[m-goldseth]

To even out seasonal and cyclical variations, a conservative way to calculate earnings would be the trailing twelve months. that also gives you some insight to RECENT performance rather than last year's old news!
You'd also want to PROJECT the next year's estimates and compare that value since you are investing for future prospects!

Course, that doesn't give the whole story.
Earnings can be manipulated with many accounting shenanigans....and many companies have a bad habit of making short term business decisions to reach wall street's earnings expectations at the expense of long-term stability.

Many analysts, self included, prefer to use cash flow to determine the ability of a company to fund growth and reward shareholders with buybacks, dividends.

SmartMoney.com has a decent stock price calculator for quick reference.
http://www.smartmoney.com/pricecheck/index.cfm?story=worksheet&nav=dropTab