What is the Sticker Price?

The Sticker Price is our estimate of what a stock is worth today. More precisely, it's the price you could pay and expect to earn exactly 15% per year over the next decade — assuming the business performs as its history suggests.

How it's built

The calculation has four steps:

1. Project future earnings. We take today's earnings per share, apply a conservatively discounted growth rate, and project forward 10 years to estimate what the company will be earning then. For businesses growing faster than is typical for their sector, that growth rate gradually eases toward a more sustainable, sector-typical pace over the projection instead of holding flat for the full decade — a fast grower rarely keeps its current pace for 10 straight years, and assuming it does would overstate the projection.

2. Estimate the future stock price. We multiply those projected earnings by an appropriate earnings multiple — the lower of the stock's historical average P/E or a ceiling tied to its growth rate.

3. Discount back to today. That future price is worth less today than in 10 years. We divide by (1.15)^10 to convert it to a present value at a 15% annual return hurdle.

4. Result: Sticker Price. The present value of the projected future price — our estimate of fair value.

What the Sticker Price is not

It's not a price target. It doesn't predict where the stock will trade. It's a valuation anchor — a number that represents "fair value given our assumptions." The actual market price can and will differ significantly from it, sometimes for years.

What happens when the assumptions change?

The scenario adjuster in every analysis lets you change the growth rate assumption and watch the Sticker Price and Payback Price update in real time. This is a useful tool for stress-testing: how much does the fair value change if growth comes in at 10% instead of 15%? The answer tells you how sensitive this particular valuation is to the growth assumption.