"has falling profits (and) is trading at a generous 23.5 P/E today" 23.5 is not generous at all if the denominator is tiny (coz of the falling profits). P/E is

"has falling profits (and) is trading at a generous 23.5 P/E today" 23.5 is not generous at all if the denominator is tiny (coz of the falling profits). P/E is actually pretty meaningless when E is small coz of low margins [1], since small transient changes in margins (e.g. .1% to 5%) can make P/E vary wildly. And it's even more meaningless when E is negative. [1] The exception being when the low margins are steady, and hence predictable.