{"id":48689,"date":"2024-03-18T18:19:58","date_gmt":"2024-03-18T17:19:58","guid":{"rendered":"https:\/\/www.captrader.com\/?post_type=glossar&p=48689"},"modified":"2024-04-09T15:43:32","modified_gmt":"2024-04-09T13:43:32","slug":"per","status":"publish","type":"glossar","link":"https:\/\/www.captrader.com\/en\/glossar\/kgv\/","title":{"rendered":"Price-earnings ratio (P\/E ratio)"},"content":{"rendered":"

The P\/E ratio is an important indicator that you may have already come across if you are involved in share trading. In this article, you will find out exactly what the P\/E ratio means and what the ratio can be used for.<\/p>\n\n\n\n

Price\/earnings ratio<\/h2>\n\n\n\n

P\/E ratio means price\/earnings ratio. This is a key figure that is used in fundamental stock analysis. Investors can find out more about the fair value of a share. This information helps to assess whether a company share is comparatively expensive or cheap<\/strong> is.<\/p>\n\n\n\n

Stock market P\/E ratio - The right stock market entry<\/h2>\n\n\n\n

Anyone who trades shares knows how important the time of entry can be. There is no such thing as the perfect time, but there are still methods that investors can use to find a find a better start<\/strong>. <\/p>\n\n\n\n

Key figures from technical analysis are used for this, including the P\/E ratio. The aim of trading shares is to profit from the performance. This is best achieved when a shareholder buys a particularly cheap company share and sells it at a higher price at a later date. You can use the P\/E ratio to Find favorably valued shares<\/strong>. <\/p>\n\n\n\n

P\/E ratio formula - How to calculate P\/E ratio?<\/h2>\n\n\n\n

You can easily calculate the P\/E ratio yourself. To do this, divide the current price of the company share by the earnings per share. <\/p>\n\n\n\n

\"Graphical<\/figure>\n\n\n\n

You can calculate earnings per share by dividing the profit of a company by the number of shares.<\/p>\n\n\n\n

\"Graphic<\/figure>\n\n\n\n

This results in the following overall formula:<\/p>\n\n\n\n

\"An<\/figure>\n\n\n\n

Price to earnings ratio definition - The different types<\/h2>\n\n\n\n

There are two different types of P\/E ratio: the trailing P\/E ratio and the closing-date P\/E ratio. The trailing P\/E ratio <\/strong>the key figure is calculated by comparing the current share price with the most recent company profit. This method can change on a daily basis.<\/p>\n\n\n\n

The P\/E ratio as of the reporting date <\/strong>takes into account the company's earnings release and the share price on the same day. This P\/E ratio therefore changes less frequently and is recalculated when a new earnings release is made by the respective group. <\/p>\n\n\n\n

Share P\/E ratio meaning - Which P\/E ratio is good?<\/h2>\n\n\n\n

The lower<\/strong> is a P\/E ratio, the cheaper<\/strong> is the price of a company share. Nevertheless, it is difficult to answer<\/strong>which P\/E ratio is considered good and which is considered rather poor. For example, it is considered very good if a P\/E ratio is in single digits, but this is rarely the case. <\/p>\n\n\n\n

There may even be cases in which a low P\/E ratio is not a reliable indication that a purchase would make sense. This occurs, for example, with a sudden price slide<\/strong> one.<\/p>\n\n\n\n

In addition, there are Growth stocks <\/strong>often characterized by a higher P\/E ratio. Experts assume rapid growth for these companies. In addition, the level of the P\/E ratio can depend on the Industry <\/strong>where a group is located. It is therefore advisable to ensure that you only compare P\/E ratios that are in the same sector. <\/p>\n\n\n\n

As a general rule, the P\/E ratio is a Meaningful key figure <\/strong>that can help investors decide whether or not to buy a share. However, it should also be noted that there are never the only key figure<\/strong> on the basis of which a purchase decision should be made.<\/p>\n\n\n\n

Conclusion: Share P\/E ratio Significance<\/h2>\n\n\n\n

The P\/E ratio or price\/earnings ratio is used in the fundamental stock analysis<\/strong> and can indicate to investors whether the price of a company share is rather expensive or cheap. It can be calculated simply by dividing the current share price by the earnings per share.<\/p>\n\n\n\n

A distinction is made between the trailing P\/E ratio and the closing-date P\/E ratio, which refer to different points in time. The P\/E ratio is a Meaningful key figure<\/strong>which can be taken into account when deciding whether a purchase is worthwhile or not. However, it should never be the only key figure that is taken into account.<\/p>","protected":false},"author":20,"featured_media":0,"template":"","class_list":["post-48689","glossar","type-glossar","status-publish","hentry"],"acf":{"blog_summary":"","blog_faq_schalter":"nein","faq_uberschrift":"","blog_faq_loop":null},"_links":{"self":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/glossar\/48689","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/glossar"}],"about":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/types\/glossar"}],"author":[{"embeddable":true,"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/users\/20"}],"wp:attachment":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/media?parent=48689"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}