Market Cap

How to read it

Market capitalization is the value of all of a company’s shares at the current share price. It moves every trading day with the price, and it changes when the number of shares changes — rising when the company issues new shares and falling when it buys its own back. stockrow shows the latest value, supplied by third-party market-data providers, and uses it as the measure of a company’s size across the site, the screener included.

What is typical

Market cap spans a vast range, from companies worth a few million dollars to the largest firms in the world, and it is usually read by size band — small, mid and large companies — rather than as a single number. Some sectors, such as technology and communication services, are dominated by very large companies, while others are made up mostly of smaller ones. Compare a company’s market cap with the median for its sector to see where it sits among its peers.

Pitfalls

Market cap is the price of the equity alone: it leaves out debt and cash, so two companies with the same market cap can carry very different amounts of debt and have very different enterprise values. It follows the share price, so it swings with market sentiment as much as with the business itself. Because it is a single latest figure, it says nothing about how the company’s value has changed over time.