The stock’s PE ratio is much higher compared to historical PE ratios. Earnings have fallen but the stock price has stayed the same. Perhaps the overall market sentiment is positive. That’s an entirely possible explanation for a high price to earnings. To get a better grasp on the situatio...
(2004). PE ratios, PEG ratios, and estimating the implied expected rate of return on equity capital... RZ Xu,MJ Lacina - 《Advances in Accounting》 被引量: 13发表: 2009年 Net stock issuance anomaly and cash flow explanation: A research note: Google Scholar, Crossref, ISI Easton, PD (...
The answer depends on the industry. Some industries tend to have higher average price-to-earnings ratios. For example, in February 2024, the Communications Services Select Sector Index had a P/E of 17.60, while it was 29.72 for the Technology Select Sector Index.To get a general idea of wh...
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A relative valuation is a mathematical way of determining whether a specific stock or a broad industry is more or less expensive than a broad market index such as theS&P 500or theNasdaq. The Bottom Line The price-to-earnings (P/E) ratio is one of the most common ratios that investors us...
However, by comparing PE ratios, you can uncover a lot about a particular company. Below are a few examples of what certain PE ratios may tell you when compared to the ratios of other companies. To get a better understanding of this, explore the following tool, which looks at a hypothetic...
To make a better investment decision, it is best to use other financial ratios like the PEG ratio and the PEGY ratio in conjunction with the PE ratio. When using the PE ratio for valuing a company, it is important to determine whether the price is overvalued or undervalued by comparing it...
While P/E ratios provide valuable insights, they shouldn't be used as the sole basis for investment decisions. Be sure to consider other factors like financial strength, management quality, competitive landscape, and industry trends. Why Is It Important? Let's say you're shopping for a pair ...
For example, technology companies tend to have higher earnings margins and PE ratios than consumer staples. When one industry makes up a higher proportion of the index, the value may look amazing or poor on the surface... while different component industries have wildly different value....
That’s where the industry PE ratios come into play. What’s the expectations of the company relative to its major peers and competitors? That’s a question that can be answered by comparing a company’s P/E ratio to its industry or historical pe ratios. ...