S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Why This Bear Market Is Not Even Close to Being Done…
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Denmark says Nord Stream 1 natural gas pipeline has also stopped leaking
Denmark says Nord Stream 1 pipelines stop leaking
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Brazil holds historic election with Lula against Bolsonaro
US shift away from coal hits tribal community in New Mexico
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Allies aim for risky Russian oil price cap as winter nears
Tesla sales bounce back in Q3 but fall short of estimates
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Why This Bear Market Is Not Even Close to Being Done…
Tailor an Options Trading Strategy to Fit Your Needs (Ad)pixel
Denmark says Nord Stream 1 natural gas pipeline has also stopped leaking
Denmark says Nord Stream 1 pipelines stop leaking
Tailor an Options Trading Strategy to Fit Your Needs (Ad)pixel
Brazil holds historic election with Lula against Bolsonaro
US shift away from coal hits tribal community in New Mexico
An All-In-One Guide for Trading Metals (Ad)pixel
Allies aim for risky Russian oil price cap as winter nears
Tesla sales bounce back in Q3 but fall short of estimates
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Why This Bear Market Is Not Even Close to Being Done…
Tailor an Options Trading Strategy to Fit Your Needs (Ad)pixel
Denmark says Nord Stream 1 natural gas pipeline has also stopped leaking
Denmark says Nord Stream 1 pipelines stop leaking
Tailor an Options Trading Strategy to Fit Your Needs (Ad)pixel
Brazil holds historic election with Lula against Bolsonaro
US shift away from coal hits tribal community in New Mexico
An All-In-One Guide for Trading Metals (Ad)pixel
Allies aim for risky Russian oil price cap as winter nears
Tesla sales bounce back in Q3 but fall short of estimates
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Why This Bear Market Is Not Even Close to Being Done…
Tailor an Options Trading Strategy to Fit Your Needs (Ad)pixel
Denmark says Nord Stream 1 natural gas pipeline has also stopped leaking
Denmark says Nord Stream 1 pipelines stop leaking
Tailor an Options Trading Strategy to Fit Your Needs (Ad)pixel
Brazil holds historic election with Lula against Bolsonaro
US shift away from coal hits tribal community in New Mexico
An All-In-One Guide for Trading Metals (Ad)pixel
Allies aim for risky Russian oil price cap as winter nears
Tesla sales bounce back in Q3 but fall short of estimates

High PE Ratio Stocks

This page lists companies that have unusually high price-to-earnings ratios (PE Ratios), which is a common financial ratio used for valuing a stock. A stock's PE ratio is calculated by taking its share price and divided by its annual earnings per share. A higher PE ratio means that investors are paying more for each unit of net income, making it more expensive to purchase than a stock with a lower PE ratio.

Learn more about trading stocks based on P/E.

MarketRank evaluates a company based on community opinion, dividend strength, institutional and insider ownership, earnings and valuation, and analysts forecasts.
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Media sentiment refers to the percentage of positive news stories versus negative news stories a company has received in the past week.
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Analyst consensus is the average investment recommendation among Wall Street research analysts.
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Analyst ConsensusUpgrade to All Access to use the All Ratings Filter
CompanyCurrent PricePE RatioMarket CapVolumeAverage VolumeIndicator(s)
Datadog, Inc. stock logo
DDOG
Datadog
$88.78
+1.5%
8,886.89$27.67 billion4.01 million3.82 million
NextGen Healthcare, Inc. stock logo
NXGN
NextGen Healthcare
$17.70
-0.8%
1,771.77$1.21 billion644,578304,562Positive News
High Trading Volume
AeroVironment, Inc. stock logo
AVAV
AeroVironment
$83.36
+1.1%
1,667.53$2.06 billion210,542326,544
Astec Industries, Inc. stock logo
ASTE
Astec Industries
$31.19
-2.1%
1,559.50$728.25 million167,43885,683Short Interest ↑
News Coverage
Gladstone Commercial Co. stock logo
GOOD
Gladstone Commercial
$15.50
+1.6%
1,551.55$602.87 million309,592235,825Short Interest ↓
Positive News
Farmland Partners Inc. stock logo
FPI
Farmland Partners
$12.67
+1.9%
1,267.00$674.91 million558,533553,717Analyst Downgrade
Short Interest ↑
Neurocrine Biosciences, Inc. stock logo
NBIX
Neurocrine Biosciences
$106.21
+3.4%
965.63$9.83 billion1.03 million699,320Analyst Downgrade
The Trade Desk, Inc. stock logo
TTD
Trade Desk
$59.75
-1.7%
853.69$29.48 billion10.17 million4.09 millionNews Coverage
High Trading Volume
Ventas, Inc. stock logo
VTR
Ventas
$40.17
+2.4%
803.56$15.85 billion3.21 million1.76 millionAnalyst Report
EVO Payments, Inc. stock logo
EVOP
EVO Payments
$33.30
666.13$1.72 billion698,652956,347Short Interest ↑
ATI Inc. stock logo
ATI
ATI
$26.61
-3.5%
665.42$3.58 billion1.11 million1.22 millionNews Coverage
CEVA, Inc. stock logo
CEVA
CEVA
$26.23
-1.5%
655.91$618.16 million116,07892,151Short Interest ↑
Markel Co. stock logo
MKL
Markel
$1,084.22
-1.6%
616.04$14.90 billion65,39547,898Short Interest ↑
PAYO
Payoneer Global
$6.05
+2.9%
605.00$2.04 billion4.30 million2.90 millionNews Coverage
Global Payments Inc. stock logo
GPN
Global Payments
$108.05
-1.4%
600.31$30.36 billion1.75 million2.51 millionAnalyst Report
Short Interest ↑
News Coverage
Navigator Holdings Ltd. stock logo
NVGS
Navigator
$11.45
+3.2%
572.79$855.93 million163,797154,284Short Interest ↓
Shoals Technologies Group, Inc. stock logo
SHLS
Shoals Technologies Group
$21.55
+1.9%
538.88$3.54 billion1.67 million1.83 millionPositive News
DHI Group, Inc. stock logo
DHX
DHI Group
$5.38
+1.3%
538.54$257.54 million177,055219,715Short Interest ↓
Gilat Satellite Networks Ltd. stock logo
GILT
Gilat Satellite Networks
$5.33
-0.4%
533.53$302.85 million176,118164,434Positive News
Insulet Co. stock logo
PODD
Insulet
$229.40
-0.8%
458.80$16.04 billion294,387384,122Short Interest ↓
FRP Holdings, Inc. stock logo
FRPH
FRP
$54.36
+1.2%
453.04$508.12 million16,28310,614Positive News
KnowBe4, Inc. stock logo
KNBE
KnowBe4
$20.81
-0.2%
416.28$3.64 billion759,7211.54 million
ServiceNow, Inc. stock logo
NOW
ServiceNow
$377.61
-2.0%
414.96$77.87 billion1.83 million1.55 million
Seabridge Gold Inc. stock logo
SA
Seabridge Gold
$11.87
+1.5%
395.80$939.24 million381,317325,837News Coverage
Ryman Hospitality Properties, Inc. stock logo
RHP
Ryman Hospitality Properties
$73.59
+0.8%
387.32$4.02 billion597,897333,762News Coverage
ICU Medical, Inc. stock logo
ICUI
ICU Medical
$150.60
-0.6%
358.58$3.62 billion320,621183,586News Coverage
BioMarin Pharmaceutical Inc. stock logo
BMRN
BioMarin Pharmaceutical
$84.77
-0.3%
326.05$15.78 billion1.44 million912,510Analyst Report
News Coverage
Goosehead Insurance, Inc stock logo
GSHD
Goosehead Insurance
$35.64
-0.9%
324.03$1.34 billion270,697454,578Positive News
Vertiv Holdings Co stock logo
VRT
Vertiv
$9.72
+0.3%
324.00$3.65 billion2.69 million3.11 million
Paramount Group, Inc. stock logo
PGRE
Paramount Group
$6.23
+2.6%
311.66$1.37 billion2.00 million1.36 millionAnalyst Report
Short Interest ↑
News Coverage
J.W. Mays, Inc. stock logo
MAYS
J.W. Mays
$38.38
+1.0%
295.25$76.63 million7501,692Short Interest ↑
Bowman Consulting Group Ltd. stock logo
BWMN
Bowman Consulting Group
$14.60
-5.7%
292.06$206.05 million41,87219,511Short Interest ↑
Positive News
High Trading Volume
Alta Equipment Group Inc. stock logo
ALTG
Alta Equipment Group
$11.01
+0.4%
275.32$356.02 million166,576109,106Short Interest ↑
Salesforce, Inc. stock logo
CRM
Salesforce
$143.84
-2.0%
266.37$146.81 billion7.58 million6.82 millionInsider Selling
Short Interest ↑
Analyst Revision
Bristow Group Inc. stock logo
VTOL
Bristow Group
$23.49
-2.0%
261.03$669.35 million74,12088,299
Viavi Solutions Inc. stock logo
VIAV
Viavi Solutions
$13.05
-1.1%
261.00$2.98 billion1.36 million1.88 millionNews Coverage
CareTrust REIT, Inc. stock logo
CTRE
CareTrust REIT
$18.11
+2.2%
258.71$1.72 billion794,413560,413
Agilysys, Inc. stock logo
AGYS
Agilysys
$55.35
+5.8%
251.60$1.31 billion374,922101,905Short Interest ↓
Positive News
High Trading Volume
ImmuCell Co. stock logo
ICCC
ImmuCell
$7.48
-1.5%
249.42$58.85 million3,9586,680Short Interest ↑
Positive News
Dynatrace, Inc. stock logo
DT
Dynatrace
$34.81
+0.6%
248.64$9.94 billion2.39 million4.76 millionShort Interest ↑
Celsius Holdings, Inc. stock logo
CELH
Celsius
$90.68
-0.2%
232.51$6.87 billion1.23 million1.18 million
GCP Applied Technologies Inc. stock logo
GCP
GCP Applied Technologies
$32.01
228.64$2.37 billion0825,110Short Interest ↑
News Coverage
Cameco Co. stock logo
CCJ
Cameco
$26.51
-1.6%
220.94$10.73 billion5.51 million6.21 millionOptions Volume
Mercury Systems, Inc. stock logo
MRCY
Mercury Systems
$40.60
-2.7%
213.70$2.41 billion320,456319,088Positive News
PG&E Co. stock logo
PCG
PG&E
$12.50
+1.0%
208.33$30.52 billion353.65 million22.28 millionAnalyst Report
Analyst Revision
High Trading Volume
First Watch Restaurant Group, Inc. stock logo
FWRG
First Watch Restaurant Group
$14.48
-0.2%
206.89$857.26 million382,243368,633Short Interest ↑
Paya Holdings Inc. stock logo
PAYA
Paya
$6.11
203.73$806.99 million582,931362,490
Oil-Dri Co. of America stock logo
ODC
Oil-Dri Co. of America
$24.20
-0.7%
201.67$175.29 million10,8566,987Gap Up
Enphase Energy, Inc. stock logo
ENPH
Enphase Energy
$277.47
-0.1%
194.04$37.64 billion3.14 million3.83 millionPositive News
Ryan Specialty Holdings, Inc. stock logo
RYAN
Ryan Specialty
$40.62
-0.3%
193.43$10.56 billion627,419602,923News Coverage
ShockWave Medical, Inc. stock logo
SWAV
ShockWave Medical
$278.07
+0.8%
190.46$9.87 billion526,781460,455Insider Selling
Berry Co. stock logo
BRY
Berry
$7.50
-2.0%
187.55$602.52 million1.90 million599,261High Trading Volume
Aptiv PLC stock logo
APTV
Aptiv
$78.21
-2.8%
186.21$21.80 billion2.10 million1.75 millionAnalyst Report
Sypris Solutions, Inc. stock logo
SYPR
Sypris Solutions
$1.86
+0.5%
186.19$40.95 million19,57129,491Positive News
Washington Real Estate Investment Trust stock logo
WRE
Washington Real Estate Investment Trust
$17.56
+1.7%
175.60$1.51 billion651,005517,490Analyst Revision
MercadoLibre, Inc. stock logo
MELI
MercadoLibre
$827.78
-0.2%
175.01$41.76 billion627,800599,284Short Interest ↑
DexCom, Inc. stock logo
DXCM
DexCom
$80.54
-1.9%
167.80$32.23 billion2.03 million2.16 million
Radware Ltd. stock logo
RDWR
Radware
$21.79
-0.1%
167.62$987.39 million228,271337,927
Selecta Biosciences, Inc. stock logo
SELB
Selecta Biosciences
$1.64
+1.9%
164.00$245.87 million731,281834,847News Coverage
Lantheus Holdings, Inc. stock logo
LNTH
Lantheus
$70.33
+1.9%
163.56$4.74 billion1.13 million884,096
Ambac Financial Group, Inc. stock logo
AMBC
Ambac Financial Group
$12.75
+1.7%
159.38$563.84 million540,354335,594Short Interest ↓
Positive News
Thorne HealthTech, Inc. stock logo
THRN
Thorne HealthTech
$4.73
-1.0%
159.33$252.11 million27,50760,288News Coverage
TechTarget, Inc. stock logo
TTGT
TechTarget
$59.20
+2.1%
155.79$1.71 billion312,060173,912
ZoomInfo Technologies Inc. stock logo
ZI
ZoomInfo Technologies
$41.66
+0.0%
154.30$16.80 billion2.97 million3.57 millionAnalyst Report
News Coverage
Chart Industries, Inc. stock logo
GTLS
Chart Industries
$184.35
+0.6%
152.36$6.71 billion380,705347,356News Coverage
Syndax Pharmaceuticals, Inc. stock logo
SNDX
Syndax Pharmaceuticals
$24.03
-2.8%
150.20$1.40 billion661,800645,375Positive News
Paylocity Holding Co. stock logo
PCTY
Paylocity
$241.58
-2.0%
150.05$13.58 billion657,186334,752
Match Group, Inc. stock logo
MTCH
Match Group
$47.75
-1.0%
149.22$13.78 billion2.94 million3.27 million
Cars.com Inc. stock logo
CARS
Cars.com
$11.50
+0.3%
143.77$778.40 million475,775484,620Short Interest ↑
N-able, Inc. stock logo
NABL
N-able
$9.23
-2.7%
131.88$1.71 billion441,810250,741
Amplify Energy Corp. stock logo
AMPY
Amplify Energy
$6.57
+4.1%
131.40$241.84 million1.08 million464,170News Coverage
High Trading Volume
Empire State Realty Trust, Inc. stock logo
ESRT
Empire State Realty Trust
$6.56
+1.4%
131.20$1.08 billion979,6471.01 millionShort Interest ↑
News Coverage
Utz Brands, Inc. stock logo
UTZ
Utz Brands
$15.10
-1.6%
125.83$2.15 billion741,658411,682
Kinetik Holdings Inc. stock logo
KNTK
Kinetik
$32.58
-1.4%
124.72$4.38 billion366,534296,732Short Interest ↓
Positive News
Altra Industrial Motion Corp. stock logo
AIMC
Altra Industrial Motion
$33.62
-0.4%
120.07$2.20 billion281,744205,408Positive News
Albemarle Co. stock logo
ALB
Albemarle
$264.44
-0.4%
119.12$31.09 billion1.08 million1.30 millionAnalyst Report
Short Interest ↑
Analyst Revision
News Coverage
Edap Tms S.A. stock logo
EDAP
Edap Tms
$8.25
+2.5%
117.86$269.40 million55,42697,939Short Interest ↓
Positive News
Mimecast Limited stock logo
MIME
Mimecast
$79.92
114.17$5.35 billion6801.63 millionNews Coverage
Postal Realty Trust, Inc. stock logo
PSTL
Postal Realty Trust
$14.67
+0.5%
112.85$274.29 million102,669153,044News Coverage
Donegal Group Inc. stock logo
DGICA
Donegal Group
$13.49
-2.5%
112.42$447.04 million101,88573,482Short Interest ↑
MSA Safety Incorporated stock logo
MSA
MSA Safety
$109.28
-1.2%
107.14$4.33 billion109,94680,701
Ballantyne Strong, Inc stock logo
BTN
Ballantyne Strong
$2.07
-3.3%
103.50$41.59 million9,78225,344News Coverage
Positive News
Gap Down
Enviva Inc. stock logo
EVA
Enviva
$60.06
-2.5%
106.16$4.11 billion545,789336,089
Commvault Systems, Inc. stock logo
CVLT
Commvault Systems
$53.04
-0.1%
106.08$2.38 billion364,247268,382News Coverage
Thomson Reuters Co. stock logo
TRI
Thomson Reuters
$102.62
-1.1%
105.79$50.01 billion468,909370,520Analyst Report
STAAR Surgical stock logo
STAA
STAAR Surgical
$70.55
-1.8%
105.30$3.45 billion603,566405,031Insider Selling
News Coverage
Hercules Capital, Inc. stock logo
HTGC
Hercules Capital
$11.58
+1.1%
105.28$1.46 billion1.35 million1.02 million
The Joint Corp. stock logo
JYNT
Joint
$15.71
-1.1%
104.74$229.65 million148,354126,023Insider Buying
Short Interest ↓
Energy Recovery, Inc. stock logo
ERII
Energy Recovery
$21.74
-2.9%
103.53$1.25 billion625,293481,130Positive News
R1 RCM Inc. stock logo
RCM
R1 RCM
$18.53
-0.1%
102.95$7.72 billion3.55 million2.35 millionPositive News
Amazon.com, Inc. stock logo
AMZN
Amazon.com
$113.00
-1.6%
101.30$1.17 trillion59.48 million54.72 millionAnalyst Report
Short Interest ↑
Regal Beloit Co. stock logo
RBC
Regal Beloit
$207.81
-1.4%
100.88$6.10 billion180,240180,391
Regal Beloit Co. stock logo
RBC
Regal Beloit
$207.81
-1.4%
100.88$6.10 billion180,240180,391
REV Group, Inc. stock logo
REVG
REV Group
$11.03
-2.0%
100.28$667.39 million208,465231,665
Bentley Systems, Incorporated stock logo
BSY
Bentley Systems
$30.59
-2.2%
98.68$8.66 billion672,421924,408
T-Mobile US, Inc. stock logo
TMUS
T-Mobile US
$134.17
-0.3%
97.93$168.84 billion6.20 million4.83 millionAnalyst Report
News Coverage
SPS Commerce, Inc. stock logo
SPSC
SPS Commerce
$124.23
-2.5%
97.06$4.59 billion390,248152,965Short Interest ↓
Positive News
High Trading Volume
Phillips Edison & Company, Inc. stock logo
PECO
Phillips Edison & Company, Inc.
$28.05
+2.6%
96.72$3.10 billion684,468719,514News Coverage
Positive News
Digi International Inc. stock logo
DGII
Digi International
$34.57
+3.1%
96.03$1.18 billion648,182324,673Short Interest ↑
News Coverage
Zimmer Biomet Holdings, Inc. stock logo
ZBH
Zimmer Biomet
$104.55
-2.4%
95.92$22.48 billion1.14 million1.13 million
Comparing and Trading High PE Ratio Stocks

This page contains a list of the companies with the highest P/E ratios. Alternatively, users can sort stocks by the lowest P/E ratios by clicking on the table item menu.

With an All Access MarketBeat subscription, it’s possible to filter this list by MarketRank, media sentiment, and analyst consensus. 

Regular users can filter it by country, sector, and market cap.

Consider this table a birds-eye view of how companies are evaluated compared to their price to earnings, which may help you spot potentially under and over-valued opportunities.

About the P/E ratio

The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings. The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple. The P/E ratio is just one way to measure a stock, but it's a very popular one. 

Many investors use the P/E ratio as a way to compare companies within the same industry quickly. The higher the P/E ratio, the more expensive the stock is relative to its earnings. The P/E ratio can be calculated for any company that has stock that trades on a public exchange. All you need is the current share price and the company's most recent earnings per share (EPS) number. The EPS number can be found on the company's income statement. 

Here's the formula for the P/E ratio: P/E Ratio = Share Price ÷ Earnings per Share (EPS) For example, let's say Company XYZ is trading at $50 per share, and it reported EPS of $5 last quarter. Company XYZ's P/E ratio would be 10 (($50 ÷ $5) = 10).

A higher P/E ratio means that investors pay more for each dollar of earnings. A lower P/E ratio means that investors pay less for each dollar of earnings. 

The P/E ratio doesn't tell you the whole story, though. A company with a high P/E ratio might be expected to grow its earnings faster than a company with a low P/E ratio. 

A company with a low P/E ratio might be in a declining industry or simply be a value stock trading at a discount to its intrinsic value. The P/E ratio is just one metric that should be considered when valuing a stock. Looking at a company's financial statements, business model, competitive advantages, and growth prospects is important before making an investment decision.

How to compare the P/E ratio

P/E ratios can also be used to compare the valuations of different companies. For example, if Company A has a P/E ratio of 20 and Company B has a P/E ratio of 10, it may be because Company A is seen as being more valuable than Company B. 

Other ratios that work with the P/E ratio

While there is no perfect ratio, certain ratios work well with the P/E ratio to provide a more complete picture of a company's valuation. 

The first ratio is the price-to-earnings growth (PEG) ratio. This ratio measures the P/E ratio of the company's earnings growth rate. A lower PEG ratio indicates that the stock is undervalued with its earnings growth. 

The second ratio is the enterprise value to EBITDA (EV/EBITDA) ratio. This ratio measures the value of a company's enterprise (the market value of its equity plus the value of its debt) concerning its EBITDA (earnings before interest, taxes, depreciation, and amortization). 

The third ratio is the price-to-book (P/B) ratio. This ratio measures the market price of a stock in relation to the company's book value (the value of its assets minus its liabilities). 

The fourth ratio is the price to sales (P/S) ratio. This ratio measures the market price of stock about the company's sales. 

The fifth ratio is the dividend yield. This ratio measures the annual dividend paid by a company concerning its stock price. 

While no single ratio can tell you everything you need to know about a stock, these five ratios can give you a better idea of whether a stock is undervalued or overvalued.

What else to consider besides the P/E ratio

Earnings are just one part of the story regarding investing in stocks. Here are some more things to consider:

  1. Revenue and earnings growth: A company's share price will eventually follow its earnings growth. Therefore, looking at a company's revenue and earnings growth over time is important to get an idea of where the stock price might be headed.
  1. Profit margins: A company's profit margin is a good indicator of its competitiveness and efficiency.
  1. Debt levels: A company with a large amount of debt may be at risk of defaulting on its loans, which could trigger a sharp decline in its stock price.
  1. Cash flow: A company's ability to generate cash flow is important because it indicates its ability to pay its bills and reinvest in its business.
  1. Analyst ratings: Analyst ratings can give you an idea of where a particular stock might be headed.

Common mistakes with the P/E ratio

The following are some of the most common mistakes made when using the P/E ratio:

  1. Ignoring the difference between trailing and forward P/E ratios

One of the most common mistakes when using the P/E ratio is comparing apples to oranges, i.e., comparing a trailing P/E ratio with a forward P/E ratio.

A trailing P/E ratio is based on historical earnings and is more reflective of a company's past performance. In contrast, a forward P/E ratio is based on estimated earnings and is, therefore, more indicative of a company's future prospects.

  1. Failing to adjust for differences in earnings

Another common mistake made when using the P/E ratio is failing to adjust for differences in earnings. For example, a company that is reporting higher earnings due to one-time items, such as the sale of a subsidiary, should not be compared with a company that is reporting more sustainable earnings growth.

  1. Comparing P/E ratios across different industries

Another mistake often made when using the P/E ratio is to compare P/E ratios across different industries. This is not an apples-to-apples comparison because different industries have different characteristics and growth prospects.

  1. Failing to consider the impact of share repurchases

Another mistake made when using the P/E ratio is to fail to consider the impact of share repurchases. When a company repurchases its own shares, it reduces the number of outstanding shares, which raises the earnings per share (EPS).

This means that a company with a high P/E ratio may not be as overvalued as it appears if it has been actively repurchasing its own shares.

  1. Failing to consider the impact of dilution

Another mistake made when using the P/E ratio is failing to consider the impact of dilution. Dilution can occur when a company issues new shares, or when existing shareholders convert their shares into new shares.

This increases the number of shares outstanding and, all else being equal, reduces EPS. This means that a company with a low P/E ratio may be more overvalued than it appears if it has been diluting its shareholders.

Disadvantages of using P/E ratio

Despite the ratio’s usefulness, there are a few potential problems with using the P/E ratio as a primary investment metric: 

1) The P/E ratio does not consider the company's debt situation. A company with a high P/E ratio but a large amount of debt may be a riskier investment than a company with a lower P/E ratio but no debt. 

2) The P/E ratio does not consider the company's cash position. A company with a high P/E ratio but a large amount of cash may be a safer investment than a company with a lower P/E ratio but no cash. 

3) The P/E ratio is a backward-looking metric. It only tells us how much investors have been willing to pay for a company's earnings in the past. It does not necessarily indicate how much they will be willing to pay in the future. 

4) The P/E ratio can be manipulated by management. For example, a company might choose to sell off a division that is not performing well to boost its P/E ratio. 

5) The P/E ratio is affected by accounting choices. For example, a company might recognize revenue when a product is shipped, even if the customer has not yet paid, to boost its P/E ratio. 

6) The P/E ratio does not take into account the company's growth prospects. A company with a high P/E ratio but poor growth prospects may be riskier than a company with a lower P/E ratio but strong growth prospects. 

7) The P/E ratio is affected by the overall market conditions. For example, when the overall market is doing well, companies with high P/E ratios may be seen as more attractive investments than when the market is doing poorly. 

8) The P/E ratio is affected by earnings variability. For example, a company with a high P/E ratio but volatile earnings may be a riskier investment than a company with a lower P/E ratio but more stable earnings.

How the P/E ratio can be manipulated

While earnings are a good indicator of a company's profitability, they can be manipulated by management through accounting techniques. As a result, the P/E ratio may not always accurately measure a company's stock price.

There are a number of ways that earnings can be manipulated. For example, companies can choose to recognize revenue when it is earned, rather than when it is received. This can artificially inflate earnings in the short term and make the P/E ratio look better than it would otherwise. Companies can also choose to defer expenses, which has the opposite effect.

In addition, companies can use accounting techniques to smooth earnings. This can make earnings look more consistent from one period to the next, even if the underlying business is not actually doing well. This can make the P/E ratio look artificially low.


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