Earning Potential

外汇网2021-06-19 16:35:20 157

The possible upside of the earnings that could be generated for each share outstanding of a particular stock. Earning potential reflects the largest possible profit that a corporation can make. It is often passed on to investors in the form of pidends. Greater earning potential drives up the price of a stock.

Taobiz explains Earning Potential

Although earning potential can cause a stock's price to rise, it will not necessarily translate into higher current pidends. A company that comes out with an innovative new product may have higher earning potential in the future, but the projected revenue may not translate into actual profit for some time.

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