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Multiples And Stock Price, New Approach For Relative Valuation Through Neural Network

Author

Listed:
  • SAIRA YAMIN

    (Department of Management Sciences, COMSATS University Islamabad, Wah Campus, Wah Cantt, Pakistan)

  • SAQIB GULZAR

    (Department of Management Sciences, COMSATS University Islamabad, Wah Campus, Wah Cantt, Pakistan)

Abstract

Artificial Neural Networks (ANNs) has been used as a powerful modeling technique for forecasting. In this study, the relationship between multiples and stock prices has been investigated on the Pakistan Stock Exchange 100 Index by incorporating financial modeling through neural network. The aim is to develop multiple-based valuation model to check whether multiples are viable factor in predicting stock movements. Forecasting model has been developed by using neural network. Prediction accuracy of the developed forecasting model has been evaluated. Findings reveal that neural network outperforms in comparison to linear regression and forecasts stock prices with 98% accuracy.

Suggested Citation

  • Saira Yamin & Saqib Gulzar, 2025. "Multiples And Stock Price, New Approach For Relative Valuation Through Neural Network," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 70(04), pages 953-971, June.
    • Handle: RePEc:wsi:serxxx:v:70:y:2025:i:04:n:s0217590820480045
    DOI: 10.1142/S0217590820480045
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    More about this item

    Keywords

    Financial forecast; multiples; neural network; stock market; stock price; valuation;
    All these keywords.

    JEL classification:

    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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