P/E ratio is one of the most commonly used indicators to evaluate whether the stock price level is reasonable. Divide the stock price by the annual earnings per share (the market value of a company divided by the annual profits attributable to shareholders can also get the same result). When calculating, the stock price usually takes the latest closing price, and if EPS is calculated according to the published EPS of the previous year, it is called historical price-earnings ratio;
Generally, consistent estimation is used to calculate EPS estimated P/E ratio, that is, the estimated average or median value obtained by the institutions that track the company's performance after collecting the forecasts of many analysts. What is a reasonable price-earnings ratio, there is no certain standard.
Extended data price-earnings ratio is an important financial indicator that investors must master, also known as price-earnings ratio, that is, the ratio of stock price divided by earnings per share. The P/E ratio reflects how many years our investment can be fully recovered through dividends when the dividend payment rate is 100% and dividends are not reinvested.
Generally speaking, the lower the P/E ratio of a stock, the lower the profitability of the market price relative to the stock, indicating that the shorter the payback period, the smaller the investment risk and the greater the investment value of the stock; On the contrary, the conclusion is the opposite.
P/E ratio is the ratio of share price to earnings per share. The price-earnings ratio widely discussed in the market usually refers to the static price-earnings ratio, which is usually used as an indicator to compare whether stocks with different prices are overvalued or undervalued.
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