What does PE P E ratio mean

The P/E ratio is the ratio of **** divided by earnings per share (earnings per share, EPS). or the market capitalisation of the company divided by the annual profit attributable to shareholders.

When calculating, the stock price is usually based on the latest ** price, and in terms of EPS, if it is calculated according to the published EPS of the previous year, it is called the historical P/E ratio. The EPS estimates used to calculate the estimated P/E ratio are generally based on the consensus estimates, which are the average or median estimates obtained by the institutions that track the company's performance by collecting the ** of multiple analysts. There is no set criterion for what constitutes a reasonable P/E ratio.

Application of the P/E ratio

There is almost no one in the market who does not pay attention to the P/E ratio of **, this measurement is simple and intuitive, and if you use the P/E ratio indicator well, it will help investors to increase their returns.

**The P/E ratio can roughly reflect the excitement of the market. In the early U.S. market, the P/E ratio was not high, less than 10 times when the market was in a downturn, and about 20 times when it was high, and the Hong Kong P/E ratio was roughly the same. When China's P/E ratio is low, it is about 15 times, and when it is high, it is more than 40 times (such as in 2001).

After the P/E ratio is too high, it always has to come down, and the duration cannot be judged, which means that it is difficult to judge how long the P/E ratio can be maintained, but it will not be maintained for a long time, which is certain.

The P/E ratio is calculated as: PE = stock price earnings per share.

The price-to-earnings ratio (PE or PER) is also known as the "price-to-earnings ratio". The P/E ratio is the ratio of **** divided by earnings per share (EPS), or the market capitalization of a company divided by annual net profit.

P/E ratios are divided into static P/E ratios and dynamic P/E ratios. Static P/E ratios are widely talked about and commonly referred to, but dynamic P/E ratios should be paid more attention to and studied. The P/E ratio, which is widely discussed in the market, usually refers to the static P/E ratio, and the dynamic P/E ratio is calculated using the static P/E ratio as the base and multiplied by the dynamic coefficient.

The factors that affect the intrinsic value of the P/E ratio can be summarized as follows:

Dividend payout ratio b. Obviously, the dividend payout ratio appears in both the numerator and denominator of the P/E ratio formula. In the numerator, the larger the dividend payout ratio, the higher the current dividend level and the greater the price-to-earnings ratio; But in the denominator, the larger the dividend payout ratio, the lower the dividend growth rate and the smaller the price-to-earnings ratio.

Therefore, the relationship between the P/E ratio and the dividend payout ratio is uncertain.

Return on risk-free assets (RF). Since the yield on a risk-free asset (usually a short-term or long-term Treasury bill) is an opportunity cost for investors and is the minimum rate of return expected by investors, a rise in the risk-free rate rises and the return on investment demanded by investors rises, and an increase in the discount rate leads to a decrease in the price-to-earnings ratio. Therefore, the relationship between the P/E ratio and the return on risk-free assets is inverse.

The above content reference: Encyclopedia - P/E ratio.

The P/E ratio is determined by the stock price and earnings per share, the P/E ratio = **current** earnings per share, it reflects the level of **valuation, relatively speaking, the lower the P/E ratio, the better, because the lower the P/E ratio, the cheaper the valuation, and the higher the P/E ratio, the more expensive the valuation.

The price-to-earnings ratio (PE), also known as the price-to-earnings ratio, is the ratio of the company divided by earnings per share (EPS) or the market capitalization of the company divided by the net profit. The P/E ratio is widely talked about in the market, and usually refers to the static P/E ratio, which is usually used as an indicator to compare whether different ** are overvalued or undervalued. When using the price-to-earnings ratio to gauge the quality of a company**, it's not always accurate.

It is generally believed that if the price-to-earnings ratio of a socks company is too high, then the price of the company is in a bubble and its value is overvalued. When a company is growing rapidly and the future performance growth is very optimistic, when using the P/E ratio to compare the investment value of different **, these ** must belong to the same industry, because at this time, the company's earnings per share are closer to each other, and they are valid to compare with each other.

The P/E ratio can be understood as the premise that a company's annual net profit remains unchanged (i.e., earnings per share remains unchanged), when the payout ratio is 100% and the dividends are not reinvested, the investment can be fully recovered through dividends after many years. Generally speaking, in the case of two similar stocks in the same industry (such as growth, dividends, etc.), the lower the price-earnings ratio, the shorter the investment period, the smaller the investment risk, and the higher the corresponding cost performance.

On the one hand, investors often do not believe that the earnings figures calculated in strict accordance with accounting standards truly reflect the profitability of the company on the basis of continuing operations, so analysts often adjust the company's officially announced net profit on their own.

However, in reality, whether the valuation of a ** is reasonable or not should not be regarded as just looking at the price-earnings ratio. Simply using the "price-earnings ratio" to measure the advantages and disadvantages of different ** markets has some one-sidedness. Since investment is an expectation for the future development of a listed company, the existing price-earnings ratio can only indicate the past performance of the listed company, and cannot represent the future development of the company.

**The price-to-earnings ratio is also known as the "price-to-earnings ratio" and "stock price-to-earnings ratio". The price-to-win ratio is a ratio that refers to the ratio of the market price of each stock of a certain ** to the profit of each share. The price-to-earnings ratio is an important reference index for **, similar stocks and **, and the price-to-earnings ratio is often used to evaluate whether the valuation level is reasonable.

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What is the P/E ratio of Investment and Financial Management Section 96.

The P/E ratio is the ratio of market price to earnings per share, expressed as an integer multiple of the stock price per share. The price-earnings ratio can roughly reflect the level of the stock price, indicating how much other currencies investors are willing to use to buy this **, which is the market's valuation of the **.

You can check the P/E ratio through the software, such as GF Software "GF Easy Rush Gold", the P/E ratio (dynamic) is the dynamic P/E ratio, the P/E ratio (static) is the static P/E ratio, and the P/E ratio (TTM) is the P/E ratio of the last 12 months.

**Is it better to have a high or low dynamic P/E ratio, from the perspective of technical analysis and historical data, it is better to have a low P/E ratio. The specific analysis of Brother Fuwu is as follows: ** dynamic P/E ratio indicates how many years of profit the company needs to accumulate to reach the current market price level, so the lower the P/E ratio index value, the smaller the better, the smaller the envy or the shorter the investment period, the smaller the risk, the higher the investment value; A large multiple means that the rollover period is long and risky.

The dynamic P/E ratio is calculated based on the static P/E ratio multiplied by the dynamic coefficient, which is 1 (1+i) n, i is the growth ratio of the company's earnings per share, and n is the duration of the company's sustainable development.

The specific calculation formula is: dynamic P/E ratio = static P/E ratio (1 + annual compound growth rate) to the nth power.

Dynamic P/E RatioIf the news is comprehensive, the dynamic P/E ratio can be calculated to unilaterally judge whether the value of a listed company is undervalued.

Theoretically** dynamic P/E ratio.

The lower the better, because the lower the dynamic P/E ratio, the better the company's performance. And in reality, this is not the same as the radical one, on the one hand, blue chips.

The price-earnings ratio is often between 0 and 30, and there is already a bubble above this value, but the price-earnings ratio of theme stocks can reach hundreds of times or more. On the other hand, some junk stocks have a higher P/E ratio that is better than a stuffy sock, because their high P/E ratio means popularity.

Therefore, for the dynamic P/E ratio, there is no standard answer to how much P/E ratio is suitable for investment. Therefore, on the surface, the ** with a low P/E ratio is suitable for investment, but in the market, there are often ** with a high dynamic P/E ratio that is more suitable for investment, because it reflects that Zheng Fanchang is optimistic about the development prospects of the company. In this regard, if you use the dynamic P/E ratio to invest, the blue chips are generally controlled within 0-30, and the theme is best maintained between 50-150, and higher is acceptable.

To sum up, whether a high or low dynamic P/E ratio is good or good is relative, and this indicator can only be said to be a reference for us, and does not play a role in determining our operation. Therefore, if we find a ** with a low dynamic P/E ratio and good growth, then it is the most suitable for investment.

Extended Information] Static P/E ratio.

Market Value Earnings per share for the most recent financial year.

For example, earnings per share is calculated by dividing the company's net income for the past 12 months by the total number of shares sold. The lower the P/E ratio, the lower the buy-in-the-lowest price for a return.

Assuming that the market price of a ** is $24 and the earnings per share for the past 12 months is $3, the P/E ratio is 24 3=8. The ** is considered to have a P/E ratio of 8 times, i.e. a profit of $1 for every $8 paid.

Dynamic P/E Ratio:

The dynamic P/E ratio (PEG) is calculated by taking the static P/E ratio as the base and multiplying it by the dynamic coefficient.

The coefficient is 1 (1+i) n, where i represents earnings per share.

The growth ratio of n is the sustainable development of the enterprise.

duration. The stock price of the listed company was 20 yuan, and the earnings per share was yuan, compared with the earnings per share of the same period last year, and the growth rate was 35%, that is, i=35%.

The company can maintain this growth rate for 5 years in the future, i.e., n=5.

Then the dynamic coefficient is 1 (1+35%) 5=.

Static P/E ratio: 20 yuan = 52 times.

Dynamic P/E ratio: 52 times.

It is good to have a low dynamic P/E ratio. Dynamic P/E ratio refers to the ratio of the current price to the annual estimated earnings per share, that is, the dynamic P/E ratio = the current price The annual estimated earnings per share, generally speaking, the higher the dynamic P/E ratio, the higher the bubble of the **, the lower the investment value, on the contrary, the lower the P/E ratio, the greater the investment value. Therefore, the dynamic P/E ratio is low, which is better for investors.

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1.P/E ratio PE is divided into orange pants static P/E ratio PE and dynamic P/E ratio PE:

Static PE = stock price earnings per share.

EPS) (year) Dynamic PE = share price * total share capital Net profit for the next year.

Need to be yourself**).

It refers to the best price-to-earnings ratio, also known as "profit yield". Earnings ratio.

It is the price per share of some common stock and earnings per share.

ratio. So it's also called the price-to-earnings ratio or price-to-earnings ratio (price-to-earnings ratio).

<> "Price-to-earnings ratio (PE)."

The price-earnings ratio, also known as the "price-to-earnings ratio", "price-to-earnings ratio" or "price-to-earnings ratio (P/E ratio)", refers to the ratio of **** divided by earnings per share (earnings per share, EPS).

1. What is the use of the P/E ratio?

For example, the company's price-earnings ratio is 10, which means that in order to get a net profit of 1 yuan, you need to pay a price of 10 yuan.

It can help us calculate the approximate payback time. For example, if a company's stock price is 20 yuan per share, and the earnings per share in the past year are 5 yuan, the price-earnings ratio is 20 5 = 4 times. It's the money you invest, and it takes 4 years for the company to earn it back.

It can help us estimate the market value of the company. For example, if a company's annual net profit is 10 billion and its price-earnings ratio is 10, then the company's valuation is 100 billion.

Which is better to have a high earnings ratio or a low earnings ratio for the market leakage of two balance acres and **?

The lower the P/E ratio, the cheaper it is, and the higher the P/E ratio, the more expensive it is.

It should be noted that the "cheap" here does not refer to the stock price, but the valuation, the price-earnings ratio itself is a valuation indicator, from its calculation formula "per share** net income per share", it can be seen that due to the existence of "net income per share", the closer the stock price and the net income per share value. The lower the P/E ratio, the lower the stock price, the lower the P/E ratio, and vice versa.

But this does not mean that there is no investment value if the P/E ratio is low, on the contrary, a high P/E ratio does not mean that there is no investment value, there are still a lot of uncertainties in the Bijing market, we can invest in the low P/E ratio ** is similar to "picking up leaks", investors need to have strong value judgment and analysis ability, in order to earn greater profits. In addition, if the P/E ratio is so low that it becomes negative, it means that the company is losing money, and the valuation effect of the P/E ratio fails.