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Companies with losses (negative earnings) or no profit have an undefined P/E ratio (usually shown as "not applicable" or "N/A"); sometimes, however, a negative P/E ratio may be shown. There is a general consensus among most investors that a P/E ratio of around 20 is 'fairly valued'.
The 'PEG ratio' (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share , and the company's expected growth. In general, the P/E ratio is higher for a company with a higher growth rate. Thus, using just the P/E ratio would make high-growth ...
A P/E far below the average can mean (among other reasons) that the true value of a company has not been identified by the market, that the business model is flawed, or that the most recent profits include, for example, substantial one-off items. Companies with P/E ratios substantially different from the peers (the outliers) can be removed or ...
The definition of the price-to-earnings ratio, usually called a P/E ratio, is the ratio between how much a stock costs and how much in profits that company is making. ... but its prospects for the ...
When you start research stocks, and trying to decide where to put your money, you're likely to come across the term price-earnings ratio. At its most basic, the P/E is a way to value a company by ...
When you buy stock, you're essentially buying a tiny piece of the company it represents. Understanding how profitable the company is in relation to its stock price can be an important consideration...
The P/E ratio is used as an initial way to determine the valuation of a stock, or how cheap it is. You'd expect to pay more for a company that's going to grow more in the future, while you want to ...
The cyclically adjusted price-to-earnings ratio, commonly known as CAPE, [1] Shiller P/E, or P/E 10 ratio, [2] is a stock valuation measure usually applied to the US S&P 500 equity market. It is defined as price divided by the average of ten years of earnings ( moving average ), adjusted for inflation. [ 3 ]