In finance, what is the PER?
In finance, PER (also known as P/E or P/E ratio ) stands for Price Earning Ratio. The P/E is calculated by dividing the share price by the net earnings per share:
The P/E can also be calculated by dividing the market capitalization by the net income:
When the P/E is between 10 and 17, the stock price is considered to be at fair value.
When the P/E is above 17, it indicates an overvaluation of the stock.
When the P/E is below 10, it indicates an undervaluation.
Of course, the P/E remains just an indicator. The analysis of a stock cannot be reduced to this single ratio.
In finance, PER (also known as P/E or P/E ratio ) stands for Price Earning Ratio. The P/E is calculated by dividing the share price by the net earnings per share:
The P/E can also be calculated by dividing the market capitalization by the net income:
When the P/E is between 10 and 17, the stock price is considered to be at fair value.
When the P/E is above 17, it indicates an overvaluation of the stock.
When the P/E is below 10, it indicates an undervaluation.
Of course, the P/E remains just an indicator. The analysis of a stock cannot be reduced to this single ratio.
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