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Was wondering- if net profit (earnings) doesn't effect market capitalization, why do investors care about EPS?
For shareholders and investors, do EPS estimates matter for non-dividend paying companies where "earnings" aren't really as important as cash flows (eg Amazon)?
so even if such "growth" companies were to be taxed higher in the future, what implications would this have for retail investors holding stocks in such companies?
Thanks
Damodaran has a proof on his blog- showing that EPS and SPX levels have a correlation of .9
I would say that is significant.
Maybe more interesting is his last post on the pandemic, and lifetime cash flows of companies in relation to their change in market cap.
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