How multiples influence earnings and affect stock price

The growth to value shift has been all the buzz in 2025.

In this episode of Stocks in Translation, Lee Munson, Portfolio Wealth Advisors, Chief Investment Officer, joins Markets and Data Editor Jared Blikre and Producer Sydnee Fried to discuss the shift and what he expects to be the next big shift in AI.

Our word of the day is multiple—a key metric for valuing companies.

“A multiple is a number you use to derive a company's value,” Blikre explains. “You take a company's earnings, revenue, or another metric and multiply it by that magic number to get the value. And that magic number is the multiple.”

For those new to financial markets, Munson breaks down what to watch for in earnings reports.

“Bottom line, the story has to get better,” he says. “When you have a higher multiple company and you have earnings growth or revenue… just a tiny, little softness [and] you're [going to] see an immediate 10, 20 plus percent drop in the price… what that tells you is that the multiple was too high versus not having the story get better.”

Find this episode's transcripts and more episodes of Stocks in Translation at https://finance.yahoo.com/videos/series/stocks-in-translation/

Thoughts? Questions? Fan mail? Email us at yfpodcasts@yahooinc.com.

Yahoo Finance's Stocks in Translation is hosted by Jared Blikre and Sydnee Fried, and produced by John Tejada.

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