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.
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.
One helpful benchmark when investing is to consider that the average forward P/E ratio of the S&P 500 for the last 25 years is 16-17x. Therefore, assuming the stock you are looking at has similar or better growth and risk versus the average S&P 500 company, buying at anything less than 16x is likely a bargain.
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.
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.
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.
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 better way to tell if a stock has a good P/E Ratio is to compare it against industry averages and growth expectations. Average P/E Ratios generally range from 20 to 25. While the lower a P/E Ratio is, the better, any P/E Ratio below this average is generally considered acceptable.
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.
Google (GOOGL) PE Ratio (TTM) : 25.47 (As of Jan. 12, 2025)
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.
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.
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.
The mean historical PE ratio of Pfizer over the last ten years is 20.1. The current 35.38 P/E ratio is 76% higher than the historical average. Looking back at the last ten years, PFE's PE ratio peaked in the Dec 2023 quarter at 75.76, with a price of $28.79 and an EPS of $0.38.
A high P/E ratio can mean that a stock's price is high relative to earnings and possibly overvalued. A low P/E ratio might indicate that the current stock price is low relative to earnings.
The current average is more than 3 standard deviations above its historical mean, signaling an overvalued market. Here is the same chart, this time with the geometric mean and deviations. The latest value of 163% is down from 164% in November and is more than 3SD above its historical mean.
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.
According to Apple's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 38.4893. At the end of 2023 the company had a P/E ratio of 29.8.
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.
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.