If you find out the average P/E ratio for all discount department stores is 25 And Wal-Mart’s next year predicted earnings per share (EPS) is $2.04 Then fundamental value for Wal-Mart (P/E ratio) * (next-year EPS) = 25*2.04=$51.00 So Wal-Mart Stock should be selling at about $51.00 a share. If way under, then it’s a good deal. If way higher, then it’s a bad deal.