It's typically done by estimating future earnings that "belong" to shareholders, and then computing the current value of those earnings. That's a dramatically

It's typically done by estimating future earnings that "belong" to shareholders, and then computing the current value of those earnings. That's a dramatically over simplified explanation, though. Look up divided discount model (DDM) and discounted cash flows (DCF) for more info. There are other methods as well, but most rely on the same principals.