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Pranjali Mhatre
Hi • 1y
What is a PE ratio? The Price-to-Earnings (P/E) ratio is a crucial metric for investors, calculated by dividing a company's current share price by its earnings per share (EPS). It helps assess whether a stock is overvalued or undervalued compared to its peers or historical performance. A high P/E may indicate high growth expectations, while a low P/E could suggest undervaluation or potential risks. However, it’s essential to consider the context, as industry norms and market conditions can significantly influence P/E values. Understanding this ratio can enhance your investment decision-making process.
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