The average P/E ratio is about 20 to 25. AP/E ratio below this range is generally considered good, while a higher ratio suggests the stock may be overpriced. A high P/E ratio can result from strong investor interest, company growth, optimistic future projections, or a rising stock price with falling earnings.
It also shows what the market is willing to pay today for a stock based on its past or future earnings. A high P/E ratio typically means that a stock's price is high relative to earnings, while a low P/E ratio indicates that a stock's price is low compared to earnings.
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.
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.
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.
According to Tesla's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 115.76. At the end of 2022 the company had a P/E ratio of 30.6.
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.
Apple (AAPL) PE Ratio (TTM) : 38.55 (As of Jan. 14, 2025)
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.
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.
Answer and Explanation: Automobile and airline stocks traditionally have low P/E ratios because they are both capital intensive industries with thin margins (low earnings).
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.
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.
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%.
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.
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.
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.
P/E ratio as of January 2025 (TTM): 6.32
According to Ford's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 6.32143. At the end of 2022 the company had a P/E ratio of -23.3.
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.