A high P/E does not tell you that stock is overvalued and a lower P/E does not mean that stock is undervalued.
P/E is simply just another metric and what it reflect is "Investor's perception about Company's Future Earnings"
Its shows "How Much investors are willing to pay for every $1 of Earnings"
In September 2021, Meta Platforms' stock reached a high of $385 with a PE ratio of 28. However, by March 2022, the stock had dropped almost 50% from its peak, with a PE ratio of 14. As a value investor, investing solely based on PE ratio, one may have believed that Meta Platforms was undervalued at a PE of 14, as it was historically trading at a PE of 28. However, even with the discounted price, the investment would have resulted in a loss of 40-50%.
P/E is simply just another metric and what it reflect is "Investor's perception about Company's Future Earnings"
Its shows "How Much investors are willing to pay for every $1 of Earnings"
In September 2021, Meta Platforms' stock reached a high of $385 with a PE ratio of 28. However, by March 2022, the stock had dropped almost 50% from its peak, with a PE ratio of 14. As a value investor, investing solely based on PE ratio, one may have believed that Meta Platforms was undervalued at a PE of 14, as it was historically trading at a PE of 28. However, even with the discounted price, the investment would have resulted in a loss of 40-50%.
Not
Finasko.com has provided a detailed guide on P/E Ratio
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, işlem veya diğer türden tavsiye veya tavsiyeler anlamına gelmez ve teşkil etmez. Kullanım Şartları'nda daha fazlasını okuyun.
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, işlem veya diğer türden tavsiye veya tavsiyeler anlamına gelmez ve teşkil etmez. Kullanım Şartları'nda daha fazlasını okuyun.