Never go above 35-40 PE for a Non consumer stock.
Market Comparison: Compare the company's P/E ratio with the overall market average. If the market average P/E is 20 and a company's P/E is 30, it might indicate that investors are expecting higher growth from this company relative to the market.
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.”
What if PE ratio is 40? A high P/E ratio, above 40, indicates investors willing to buy a stock at 40 times or more its earnings. Whether investing at a high PE ratio is good or bad depends on various factors.
So, what is a good PE ratio for a stock? A “good” P/E ratio isn't necessarily a high ratio or a low ratio on its own. The market average P/E ratio currently ranges from 20-25, so a higher PE above that could be considered bad, while a lower PE ratio could be considered better.
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.
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.
Apple (AAPL) PE Ratio (TTM) : 38.55 (As of Jan. 14, 2025)
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.
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.
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.
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.
As of today (2025-01-13), NVIDIA's share price is $135.91. NVIDIA's EPS without NRI for the trailing twelve months (TTM) ended in Oct. 2024 was $2.60. Therefore, NVIDIA's PE Ratio without NRI for today is 52.37.
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.
Apple's analyst rating consensus is a Moderate Buy. This is based on the ratings of 29 Wall Streets Analysts.
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.
Now, here's the thing: If stocks' average EPS growth is rising over time, the stock market's P/E ratio needs to settle at a higher level, as well, to fairly price in the higher profit growth. That's why today's P/E ratio of around 30 isn't as alarming as it would have been in the past.
P/E ratio as of December 2024 (TTM): 15.1
According to Best Buy's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 15.0995. At the end of 2022 the company had a P/E ratio of 11.9.
For instance, if Company A has a P/E ratio of 40% and Company B with similar characteristics in the same industry demonstrates a ratio of 10% it essentially means that shareholders of company A have to pay Rs. 40 for Re. 1 of their earnings and shareholders of company B have to pay Rs. 10 for Re.
"Traditional valuation measures suggest the S&P 500 is currently more than 20% overvalued, yet trend-following measures, like momentum, remain strong."
S&P 500 PE Ratio was 29.096 as of 2025-01-10, according to GuruFocus. Historically, S&P 500 PE Ratio reached a record high of 131.391 and a record low of 5.31, the median value is 17.93. Typical value range is from 20.62 to 28.66. The Year-Over-Year growth is 17%.
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.