ATLASMarket capitalization
Investing glossary · Valuation and fundamentals
The total market value of a company's shares: the share price multiplied by the number of shares outstanding.
Definition
Market capitalization, or market cap, is the price of one share multiplied by the number of shares outstanding. It is the market's current valuation of the whole equity of the company, and it is the usual measure of company size.
Companies are often grouped by market cap: large caps (above roughly 10 billion dollars), mid caps and small caps. Size matters because larger companies tend to be more stable and easier to trade, while smaller ones can grow faster but are more volatile. Market cap is not the price of the whole business, because it ignores debt and cash.
Formula
Market cap = share price × shares outstanding
Shares outstanding is the number of shares held by all investors, including insiders.
Worked example
Apple (AAPL) trades at $346.86 per share. With about 14.0B shares outstanding, its market capitalization is $4.9T.
Two stocks with very different share prices can have the same market cap; compare companies by market cap, not by price per share.
How ATLAS uses it
ATLAS shows market cap in the company's currency and, for foreign listings, in dollars too.
Related in ATLAS: Stock analysis →Browse all ATLAS tools →See it on a real stock
The example above uses these companies. Open their pages for the full numbers:
Frequently asked questions
Does a low share price mean a cheap company?
No. A company with a low share price can be worth more than one with a high price if it has many more shares. Use market cap and valuation ratios to compare.
What is the difference between market cap and enterprise value?
Enterprise value adds the company's debt and subtracts its cash to the market cap, so it approximates the price of the whole business, not only the equity.
Related terms
Put the idea to work on your own stocks
Open any company in ATLAS to see its fair value, its odds of rising and its risk numbers side by side.
Try ATLAS →Not investment advice. ATLAS estimates are produced by statistical models from public data; they can be wrong and past performance does not predict future results. Consider your own situation before investing. Disclaimer