P/E Weight Ratio (Fourth Root 2G2R Version)
P/E Weight Ratio
(Fourth Root 2G2R Version)
=
P/E ÷ ∜(Gnet_profit × Ginvested_capital × ROIC × ROA)
Or
=
P/E ÷ [ 100 × { ∜(Gnet_profit Factor × Ginvested_capital Factor × ROIC Factor × ROA Factor) - 1 } ]
.
Case Study:
(1)
PDD
(Financial.2025.Sep.Q3.TTM)
.
P/E Weight Ratio at USD 115.97
(Fourth Root 2G2R Version)
=
P/E
÷
[ 100 × { ∜(Gnet_profit Factor × Ginvested_capital Factor × ROIC Factor × ROA Factor) - 1 } ]
=
(115.97 ÷ 10.289979567)
÷
[ 100 × { (0.9445998189 × 1.3925129068× 1.254354775147 × 1.16663851178)^(1÷4) - 1 } ]
= ( 11.2701875883 ) ÷ [ 17.7879723853 ]
= 0.6335847248
< 1, undervalued at USD 115.97
.
(2)
Intrinsic P/E
(At P/E Weight Ratio 1 of Fourth Root 2G2R Version)
= 17.7879723853
.
(3)
Intrinsic Value
(At P/E Weight Ratio 1 of Fourth Root 2G2R Version)
= Intrinsic P/E × EPS
= 17.7879723853 × 10.289979567
= USD 183.0378723831