What is the earnings payback (implied P/E)?
The number of years a company would take to earn back its share price, with its earnings growing at the rates you expect. A P/E of 20 with no growth pays back in 20 years; with earnings growing 15% a year for five years and slower after, in about 10.
It reads the P/E as a payback period, then adds growth, which the P/E leaves out. That makes it useful for comparing a high-P/E growth stock with a cheaper, slower one on the assumptions you believe. A discount rate can count later years' earnings for less.
HedgeFollow's calculator was called the Implied P/E calculator; it fills in a stock's P/E and expected growth from our data.
Related pages: Earnings Payback Calculator