6 Types of Market Cap

John Spacey, May 06, 2018

Market cap, or market capitalization, is the value of a firm as calculated by its shares outstanding multiplied by its price. This is essential the market's valuation of a company at a point in time. The following are common levels of market cap.

Mega Cap

Firms with a market capitalization over $300 billion.

Large Cap

Firms with a market capitalization over 10 billion. Most of the value of global stock markets is invested in large cap stocks. In many cases, people also refer to mega cap stocks as large cap.

Mid Cap

A market capitalization between $2 and $10 billion.

Small Cap

A market capitalization between $300 million and $2 billion.

Micro Cap

A market capitalization between $50 and $300 million.

Nano Cap

A market capitalization below $50 million. This represents a large part of the economy in many nations as small businesses that are privately owned often fall into this category.

Formula

Market capitalization is calculated as

market cap = # shares outstanding × price

Market Cap vs Enterprise Value

Market cap isn't a good valuation metric because it doesn't reflect the full capital structure of a firm. For example, a 50 billion market cap for a large firm may seem like a great deal until you realize it has 500 billion in debt. Enterprise value is a more comprehensive metric that includes market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents.

Notes

The ranges above have changed over time due to factors such as inflation and are likely to change in future.

Overview: Market Cap
Type	Investment
Definition	The value of a firm as calculated by its shares outstanding multiplied by its price.
Also Known As	Market Capitalization
Related Concepts	Investment » Inflation »