What is a good PE?

Typically, the average P/E ratio is around 20 to 25. Anything below that would be considered a good price-to-earnings ratio, whereas anything above that would be a worse P/E ratio. But it doesn't stop there, as different industries can have different average P/E ratios.

What is a good PE value?

As far as Nifty is concerned, it has traded in a PE range of 10 to 30 historically. Average PE of Nifty in the last 20 years was around 20.* So PEs below 20 may provide good investment opportunities; lower the PE below 20, more attractive the investment potential.

Is a PE of 30 good?

P/E 30 Ratio Explained

A P/E of 30 is high by historical stock market standards. This type of valuation is usually placed on only the fastest-growing companies by investors in the company's early stages of growth. Once a company becomes more mature, it will grow more slowly and the P/E tends to decline.

Is 14 a good PE ratio?

The price-to-earnings ratio (P/E ratio) is a quick way to gauge whether a stock is undervalued or overvalued. All else equal, the lower the P/E ratio, the better the investment. For this reason, a P/E of less than 20x is “good” and anything higher than 30x is “bad.” But the P/E ratio can be misleading.

What is a good PE ratio UK?

In general, stocks with P/E ratios of below 15 are considered cheap, while stocks above about 18 are thought of as overpriced. But ultimately, whether a P/E ratio is high or low will depend on the industry it's in.

PE Ratio Explained Simply | Finance in 5 Minutes!

Is 7 a good PE ratio?

Typically, the average P/E ratio is around 20 to 25. Anything below that would be considered a good price-to-earnings ratio, whereas anything above that would be a worse P/E ratio. But it doesn't stop there, as different industries can have different average P/E ratios.

Is PE ratio below 5 good?

Very low vs very high PE ratios

It is arguable that a PE of five or less is not a remarkable bargain. While it might look as if the company's prospects are being viewed too negatively, it is not a bad rule of thumb to filter out companies with a PE below this level.

Why is Tesla PE ratio so high?

Tesla has positioned itself as a leader in the electric vehicle market and has also expanded into other areas, such as energy storage and solar power. To do this, Tesla spends a lot of money on capital expenditures and because of this reduces its current earnings which makes the P/E ratio higher.

Is 200 a high PE ratio?

A P/E ratio of 200 is high. But it is basically saying that people expect the company to grow earnings to be 15 to 20 times as large as they are now (so the P/E ratio would be 10 to 15). If you don't think that the company has that kind of potential, don't invest.

Is Tesla stock Overvalued?

Tesla's (TSLA) valuation - or what some would call “gross overvaluation” - has always been a sore point between bulls and bears. The Elon Musk-run company's current market cap is $811.59 billion - which, for context, is over three times that of Toyota Motors (TM), the second-biggest automaker by market cap.

Is 100 PE ratio good?

If the relative P/E measure is 100% or more, this tells investors that the current P/E has reached or surpassed the past value.

Is a low PE bad?

P/E ratio, or price-to-earnings ratio, is a quick way to see if a stock is undervalued or overvalued. And so generally speaking, the lower the P/E ratio is, the better it is for both the business and potential investors. The metric is the stock price of a company divided by its earnings per share.

What is the PE ratio of Tesla?

As of today (2023-12-03), Tesla's share price is $238.83. Tesla's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Sep. 2023 was $3.11. Therefore, Tesla's PE Ratio for today is 76.79.

What is the PE ratio of Apple?

As at Dec 1, 2023, the AAPL stock has a PE ratio of 31.05. This is based on the current EPS of $6.16 and the stock price of $191.24 per share. An increase of 13% has been seen in the P/E ratio compared to the average of 27.5 of the last 4 quarters.

Is 80 PE ratio good?

For instance, if the company's relative PE ratio is 80% in comparison to the benchmark PE ratio, it indicates that the absolute ratio is lower than the benchmark. On the contrary, if the relative PE is higher than 100%, the company has outperformed the benchmark index during the specific period.

Is 18 a good PE ratio?

Whether a P/E ratio is high or low will depend on the industry it's in. However, in general, stocks with P/E ratios of below 15 are considered cheap, while stocks above about 18 are thought of as overpriced.

Is a high PE overvalued?

The P/E ratio is calculated by dividing the market value price per share by the company's earnings per share. A high P/E ratio can mean that a stock's price is high relative to earnings and possibly overvalued. A low P/E ratio might indicate that the current stock price is low relative to earnings.

What is considered an overvalued PE ratio?

Investors and analysts consider stocks which have a P/E ratio of 50 or above to be an overvalued share, especially in comparison to a stock which has a ratio at par with or below 10. As it allows investors to determine that its share prices are considerably higher than what a company can afford to pay as dividends.

Why buy high PE stocks?

A high P/E ratio can be a good indicator of a company with good growth prospects. However, it is not enough to look at the P/E ratio alone. Ensure that you analyze the financials and fundamentals of the company and its competition to determine its growth prospects. This can help you make a more informed decision.

What is the PE ratio of Amazon?

The PE ratio for Amazon Com stock stands at 75.4 as of Dec 1, 2023. This is calculated based on the TTM EPS of $1.95 and the stock price of $147.03 per share.

Why are high PE ratios bad?

A high ratio means the stock is overvalued. However, a high ratio often signifies that it is a growth stock, meaning there is a chance of high future performance, even if the cost per share is high at the moment. However, growth stocks are also volatile, meaning they can be risky investments.

Why is Salesforce PE ratio so high?

Salesforce tends to use much of its revenue to expand marketing and R&D spending. The goal is to grow as much as possible and neglect profit for the time being (which is why the P/E is so high). This is a strategy designed for long-term benefits but sacrifices profitability in the short term.

Is 15 PE ratio good?

Understanding the P/E ratio can help you make informed investment decisions. In Chapter 14 of the Intelligent Investor, the father of value investing, Ben Graham, said never pay more than 15 times earnings to buy a stock.

Is a 50 PE ratio good?

In the heat of a bull market, it's not uncommon to find "hot" stocks trading at a P/E of 50 or more. While this can go on for some time, eventually the stock's price may drop.

Which stock has highest PE ratio now?