To give you some sense of what the average for the market is, though, many value investors would refer to 20 to 25 as the average P/E ratio range. And again, like golf, the lower the P/E ratio a company has, the better an investment the metric is saying it is.
A high P/E ratio for a fast-growing company may make a lot of sense, so it's important to understand the growth outlook before making a judgment solely based on the P/E ratio. A PEG ratio above 2 is typically considered expensive, while a ratio below 1 may indicate a good deal.
The other has a share price of $50 and a PE ratio of 30. The first company's share price may be higher, but a PE ratio of 15 means you're only paying $15 for every $1 of the company's earnings. Investors in the company with a PE ratio of 30 are paying $30 for $1 of earnings.
The avg P/E of the S&P 500 is usually around 15. Low P/E around 5 or less is a sign of a fundamental problem with the business, and a sign to stay away from, despite other possibly good metrics.
A good PE (Price to Earnings) ratio in India usually falls between 12 and 20, indicating that a company's stock is neither overvalued nor undervalued. This range balances risk and growth potential, making it ideal for Indian stock market investment.
Apple (AAPL) PE Ratio (TTM) : 38.55 (As of Jan. 14, 2025)
Why Is a Company's P/E Ratio Important? A company's price-to-earnings ratio alerts investors to whether a company's stock is under or overvalued compared to its earnings. Investors can use this financial metric to compare one company to another in the same industry.
According to Tesla's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 118.273. At the end of 2022 the company had a P/E ratio of 30.6.
The justified price to earnings ratio is the price to earnings ratio that is “justified” by using the Gordon Growth Model. This version of the popular P/E ratio uses a variety of underlying fundamental factors such as cost of equity and growth rate.
The stock's forward price-to-earnings (P/E) ratio climbed more than 35% during the year to 29. Investors were willing to pay a larger premium relative to short-term results. That indicates more optimism about Apple's prospects and higher investor risk tolerance overall.
The P/E for a stock is computed by dividing the price of a stock (the "P") by the company's annual earnings per share (the "E"). If a stock is trading at $20 per share and its earnings per share are $1, then the stock has a P/E of 20 ($20/$1).
S&P 500 P/E Ratio is at a current level of 28.77, up from 27.87 last quarter and up from 23.27 one year ago. This is a change of 3.23% from last quarter and 23.62% from one year ago. The S&P 500 PE Ratio is the price to earnings ratio of the constituents of the S&P 500.
Thus, the evidence is overwhelming that low PE stocks earn higher returns than high PE stocks over long periods. Those studies that adjust for differences in risk across stocks confirm that low PE stocks continue to earn higher returns after adjusting for risk.
The PE ratio for Amazon Com stock stands at 45.9 as of Jan 10, 2025. This is calculated based on the TTM EPS of $4.77 and the stock price of $218.94 per share.
The mean historical PE ratio of Costco Wholesale over the last ten years is 35.42. The current 54.17 P/E ratio is 53% higher than the historical average. Looking back at the last ten years, COST's PE ratio peaked in the Nov 2024 quarter at 56.47, with a price of $964.01 and an EPS of $17.07.
What does a good P/E ratio mean? In simple terms, a good P/E ratio is lower than the average P/E ratio, which is between 20–25. When looking at the P/E ratio alone, the lower it is, the better. For new investors, “P/E” might as well mean “physical education.”
Although the average standard P/E ratio is around 20 to 25. Anything below that would be considered a good price-to-earnings ratio, Some world famous invester consider below 15 is good PE Ratio to invest in the stock.
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.
As of today (2025-01-13), Walmart's share price is $93.00. Walmart's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Oct. 2024 was $2.44. Therefore, Walmart's PE Ratio (TTM) for today is 38.16.
According to Coca-Cola's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 24.759. At the end of 2022 the company had a P/E ratio of 28.9.