Analysts often use the P/E multiple (the price per share divided by the earnings per share) or the P/CF multiple (price per share divided by cash flow per share, which is the earnings per share plus the dividends per share) to value stocks.
Example:
Estimate the average P/E ratio of comparable firms. This is the P/E multiple.
Multiply this average P/E ratio by the expected earnings of the company to estimate its stock price.