Market capitalization
Market cap
What it is
Total company value on the market: price × shares outstanding. It's what it would cost to buy 100% of the company (in theory). Determines the company's "size" on markets.
How to read it
Standard categorization: mega-cap (> $200B), large-cap ($10-200B), mid-cap ($2-10B), small-cap ($0.3-2B), micro-cap (< $0.3B). Large-caps are more liquid, less volatile, better covered by analysts. Small-caps offer more upside but also more risk and volatility.
Common reference points
- Mega-cap — global giant> $200B
- Large-cap — well established$10 – 200B
- Mid-cap — growth$2 – 10B
- Small-cap — risk/upside$0.3 – 2B
- Micro-cap — speculative< $0.3B
Orders of magnitude, not a rule: the same number does not mean the same thing from one sector to the next.
What it does not tell you
Market cap says nothing about company quality. A big cap can be overvalued, a small one can be an undiscovered gem. Use it to calibrate volatility expectations, not to judge value.
Other measures — Market
Educational content. Polaris is not a registered investment adviser and makes no recommendation.