What is a good PE ratio to buy stocks?

Asked by: Christina Homenick I  |  Last update: February 12, 2025
Score: 4.7/5 (50 votes)

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.

What is the best buy PE ratio?

BBY (Best Buy Co) PE Ratio (TTM) : 14.73 (As of Jan. 03, 2025)

What if the PE ratio is more than 30?

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.

Is the P/E ratio of 40 good?

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.

What is a good forward PE ratio?

A “good” forward P/E ratio depends on the industry and market conditions. In general, a lower forward P/E may indicate that a stock is undervalued, while a higher ratio suggests expectations of future growth.

PE Ratio Explained Simply | Finance in 5 Minutes!

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What PE ratio should I buy?

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.

What is the safest PE ratio?

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 is a strong PE ratio?

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.

What is the PE ratio of Apple?

Apple (AAPL) PE Ratio (TTM) : 38.55 (As of Jan. 14, 2025)

Does PE ratio really matter?

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.

What is the PE ratio of Tesla?

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.

How to understand PE ratio?

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

What is the PE ratio of target?

As of today (2025-01-13), Target's share price is $138.77. Target's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Oct. 2024 was $9.43. Therefore, Target's PE Ratio (TTM) for today is 14.72.

What is the average PE ratio of the stock market today?

Basic Info. 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.

What is Amazon's PE ratio?

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.

What is the PE ratio of Costco?

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 is the PE ratio of Coca Cola?

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.

What is the ideal PE ratio to buy?

What is a good PE ratio in India? A good P/E ratio isn't always a high or low ratio on its own. The market average P/E ratio is currently between 20 and 25.

What is the PE ratio of Google?

Google (GOOGL) PE Ratio (TTM) : 25.47 (As of Jan. 12, 2025)

What is a good beta for a stock?

A beta coefficient of less than 1 means that a stock tends to be less volatile than the overall market. Utility and real estate stocks are two examples of industries that typically have low betas. A beta coefficient of more than 1 means that a stock tends to be more volatile than the overall market.

What is the justified PE ratio?

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.

What is a good price-to-book ratio?

P/B ratio reflects how many times book value investors are ready to pay for a share. So, if the share price is $10 and the book value of equity is $5, investors are ready to pay two times the book value. Ideally, a P/B value under 1.0 is considered good as it indicates that the stock is potentially undervalued.

What is a good earnings per share?

There's no fixed answer for what is a good EPS. When comparing companies, it's helpful to look closely at how EPS is trending and how it matches up to competitor earnings. Remember that a higher EPS can suggest growth and stock price increases.