Ultimately, there's no hard-and-fast rule for what a good P/E ratio is. But in general, many value investors consider a lower P/E ratio better. Again, these ratios are often used in a comparative sense, so what's good or bad depends on what you're comparing it against.
The P/E Ratio is calculated by dividing a stock's price by its earnings per share. As an example, a stock with a price of $90 and earnings per share of $10 has a P/E Ratio of 9 (90/10). Companies that have no earnings or that are losing money do not have a P/E ratio because there is nothing to put in the denominator.
If the PE of a Bohr's hydrogen atom in the ground state is zero, then its total energy in the first excited state will be : 23.8eV.
A persistent negative P/E ratio indicates that the company is consistently experiencing losses. This might signal deeper financial or operational problems such as declining revenues, poor cost management or ineffective business strategies.
This ratio is used to assess the current market price against the company's book value (total assets minus liabilities, divided by number of shares issued). To calculate it, divide the market price per share by the book value per share. A stock could be overvalued if the P/B ratio is higher than 1.
The price-to-earnings (P/E) ratio is a stock valuation metric that looks at share price relative to earnings per share. A negative P/E ratio means that a stock is losing money. The formula for the P/E ratio is as follows: P/E ratio = share price / earnings per share.
The potential energy U of a body at some point x is defined to be the work done on the object by an extra, imposed force to move it from a reference position to its current position. The reference point is called the "zero point" of potential energy as the potential energy will be zero there by definition.
If the share price falls much faster than earnings, the PE ratio becomes low. A high PE ratio means that a stock is expensive and its price may fall in the future. A low PE ratio means that a stock is cheap and its price may rise in the future. The PE ratio, therefore, is very useful in making investment decisions.
Flexi Says: The potential energy (PE) is zero at the bottom because it doesn't have any height. Potential energy is calculated as PE = mgh, where m is mass, g is gravity, and h is height. If the height (h) is zero, then the potential energy is also zero, regardless of the object's speed.
When an investor sees that a company has a P/E ratio that reads N/A, it may be a warning sign that a company is in financial trouble. It may also mean it's too new to the investment world. Frankly, the P/E ratio is just one of several metrics used for fundamental analysis.
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.”
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.
If earnings of the company is negative i.e. it is in loss then P/E ratio can not be stated. To calculate P/E you will have to divide market capitalization of the company by its net earnings i.e. PAT.
Apple (AAPL) PE Ratio (TTM) : 38.55 (As of Jan. 14, 2025)
Fair Value Estimate for Nvidia
With its 2-star rating, we believe Nvidia's stock is overvalued compared to our long-term fair value estimate of $105 per share, which implies an equity value of roughly $2.5 trillion.
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.
A negative P/E ratio suggests the company is currently unprofitable, as it has more expenses than revenue. It often means the company made no money over the last 12 months.
The price-to-earnings (P/E) ratio is the proportion of a company's share price to its earnings per share. A high P/E ratio could mean that a company's stock is overvalued or that investors expect high growth rates.
The correct choice for the zero potential energy level is arbitrary (d). In physics, the choice of zero potential energy level is arbitrary and can be set to any convenient reference point.
I just recently took the PE exam and found out I did not pass. I studied for months using multiple sources. I took PPI's course over 3 months, did PPI practice problems, and also had PPI's practice exam. I also took the NCEES practice exam.
Low risk group: 1.3% chance of PE in an ED population. Another study assigned scores ≤ 4 as “PE Unlikely” and had a 3% incidence of PE. Dr. Wells on use of his scores for MDCalc: The model should be applied only after a history and physical suggests that venous thromboembolism is a diagnostic possibility.
The p/e or price to earnings ratio is a mathematical ratio. Mathematically, the ratio can't become zero, since the stock price will rarely become a complete zero. The only possibility is the stock getting delisted from the exchange, when technically it's a zero value stock.
If you equate 'ratio' to a division problem, then of course the ratio could be zero. All you'd have to do is make sure the value representing the numerator is zero and the value representing the denominator is not.
The first solution yields the positive irrational number 1.6180339887… (the dots mean the numbers continue forever) and this is generally what's known as phi. The negative solution is -0.6180339887... (notice how the numbers after the decimal point are the same) and is sometimes known as little phi.