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2
votes
1answer
61 views

How can I understand why investors think a particular company should have a high PE ratio?

Say a particular stock has a PE ratio of 30. Given that a standard valuation is closer to 10 or 15 times earnings, a PE ratio of 30 implies that investors foresee a lot of growth. How can I ...
1
vote
1answer
126 views

Why do P/E ratios for a particular industry tend to cluster around particular values?

The answer I've read on this topic is that a new industry with a lot of growth potential (software, biotech, etc.) tends to have the stock priced at a premium in order to reflect the growth ...
2
votes
1answer
2k views

How do you calculate the P/E ratio by industry?

I would like to know how to calculate the P/E ratio by industry. On this website, it displays the P/E ratio for the current stock, the industry and the sector: FINANCIALS DTV.O ...
3
votes
3answers
207 views

Investing: P/E Ratio basic question

I'm just starting out in investing so I apologize if this comes across as annoyingly simple question. I've just read about PE Ratio and I came across this video from investopedia P/E Ratio Video which ...
2
votes
1answer
366 views

Why do PE ratios for small cap stocks tend to be greater than those for large cap stocks?

As a general rule, why is the PE ratio of small cap stocks greater than the PE ratio of large cap stocks? Is it just a coincidence? Or is there a reason?
0
votes
1answer
234 views

What's the connection between P/E ratio and growth?

Is there an exact formula for that if we can predict the growth accurately? For example: Using discounted cash flow analysis, the impact of earnings growth and inflation can be evaluated. Using ...
5
votes
3answers
3k views

Why does the biotechnology industry have such a high PE ratio?

I'm looking at this link, which lists P/E ratios by industry. I see that biotechnology has a P/E ratio of 145, which is very high compared to other industries. What is so special about this industry ...
2
votes
1answer
377 views

How to calculate/reconcile conflicting P/E ratios?

Was reading over some old LinkedIn IPO press coverage and noticed some drastically different P/E ratios being reported. Note: I know that CBS uses the $45 IPO price and ZH uses the $83 opening price. ...
7
votes
2answers
3k views

What is the P/E ratio for a company with negative earnings?

I know that PE ratio = (share price) / (net earnings per share), so does a company with a net loss mean they have a negative 1-year trailing PE? Is this surprising/unusual? What about for a company ...
2
votes
2answers
4k views

What is the formula for determining estimated stock price when I only have an earning per share number?

I need a formula for determining estimated stock price when I have an EPS number only. For instance, the EPS number "earnings per share" is created using a known number of shares, to solve for the ...
5
votes
1answer
2k views

Where can you find historical PEs of US indices?

Indices tracking ETFs * DIAMONDS Trust I (ticker: DIA) tracks DJIA * SPDRs (ticker: SPY) tracks S&P 500 * NASDAQ 100 Trust (ticker: QQQQ) tracks NASDAQ 100 * iShares Russell 2000 (ticker: IWM) ...
3
votes
3answers
2k views

How to calculate PE ratios for indices such as DJIA?

I want to record Dow Jones Industrial Average's PE. Yahoo Finance gives N/A [1]: >>> import y_finance >>> print y_finance.get_price_earnings_ratio('^DJI') N/A So: How to ...
14
votes
3answers
331 views

What is the p/e ratio?

What is the p/e ratio and how do I find it for a company?