P/E Ratio (TTM)
Returns the Price to Earnings ratio, the most widely used stock valuation metric. P/E shows how much investors are willing to pay per dollar of earnings.
P/E Formula
P/E Ratio = Stock Price / Earnings Per Share
Understanding P/E
| P/E Range | General Interpretation |
|---|---|
| < 10 | Potentially undervalued or troubled |
| 10-20 | Fair value for mature companies |
| 20-30 | Growth premium |
| > 30 | High growth expectations |
Types of P/E
| Type | Description |
|---|---|
| Trailing (TTM) | Based on last 12 months earnings (this function) |
| Forward | Based on estimated future earnings |
| Shiller CAPE | Cyclically adjusted, 10-year average |
Industry Comparison
P/E varies significantly by industry:
- Tech: 25-50+
- Utilities: 15-20
- Banks: 8-15
- Retail: 15-25
Parameters
| Parameter | Description |
|---|---|
| Symbol | Stock ticker symbol |
Examples
When to Use
- Quick stock valuation assessment
- Compare valuations within an industry
- Screen for undervalued stocks
- Determine if a stock is expensive
- Fundamental analysis
When NOT to Use
| Scenario | Use Instead |
|---|---|
| Company has negative earnings | PricePerSales() |
| Need growth-adjusted valuation | PEGRatio() |
| Need book value-based | PricePerBook() |
| Comparing across industries | PEG or industry-specific metrics |
Common Issues & FAQ
Q: Why is P/E returning "NA" or negative? A: P/E is undefined for companies with:
- Negative earnings (unprofitable)
- Zero earnings
Use
PricePerSales()for unprofitable companies.
Q: Why compare P/E within industries? A: Different industries have different typical P/E ranges due to growth rates, capital intensity, and risk profiles.
Q: Is this forward or trailing P/E? A: This returns TTM (Trailing Twelve Months) P/E based on actual reported earnings.
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