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 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.
Never go above 70-80 PE for a consumer stock.
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.”
If the relative P/E measure is 100% or more, this tells investors that the current P/E has reached or surpassed the past value.
Apple (AAPL) PE Ratio (TTM) : 38.23 (As of Jan. 13, 2025)
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. But it doesn't stop there, as different industries can have different average P/E ratios.
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.
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.
In May 2009, the P/E ratio reached a staggering 123.73x, the highest ratio in United States history. This was primarily due to the depressed earnings during the “Great Recession” and has been the only instance since 1970 in which the P/E ratio reached triple digits.
"Traditional valuation measures suggest the S&P 500 is currently more than 20% overvalued, yet trend-following measures, like momentum, remain strong."
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).
An 80 PE ratio is generally considered very high and may suggest overvaluation unless the company has exceptional growth prospects. Ideally, such a high PE ratio warrants careful analysis of the company's future earnings potential, industry position, and broader economic factors.
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.
Google (GOOGL) PE Ratio (TTM) : 25.33 (As of Jan. 14, 2025)
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.
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.
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.
As of today (2025-01-13), NVIDIA's share price is $132.105. NVIDIA's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Oct. 2024 was $2.54. Therefore, NVIDIA's PE Ratio (TTM) for today is 51.99.
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.
According to Microsoft's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 36.1475. At the end of 2023 the company had a P/E ratio of 33.9.
Netflix (NFLX) PE Ratio (TTM) : 47.41 (As of Jan. 12, 2025)