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Actually, price / earnings (P/E ratio) is typically 10-20 for _any_ company in the S&P 500. When you look at big tech, the numbers are drastically higher: - AM
by vitus 6y ago
Actually, price / earnings (P/E ratio) is typically 10-20 for _any_ company in the S&P 500. When you look at big tech, the numbers are drastically higher:
- AMZN: 92
- GOOG: 34
- FB: 33
- NFLX: 76
- AAPL: 35
- MSFT: 35
Compare this to, say, 3M, at 19, or GM with 17.
edit: incidentally, apparently Zoom's P/E is... 527, which is grossly inflated even for a tech company. Tesla is also in the same category with a P/E of 834.
- A4ET8a8uTh0 6y agoIt is, but markets can stay irrational longer than you can stay liquid to paraphrase somewhat famous quip. I was also one of those people who tried shorting TSLA since I believe they are way overvalued. I agree with you, but the market has spoken.
- chasebank 6y agoP/E ratio formula is listed above correctly, however, earnings is earnings per share, not revenue. So the parent's market valuation rationale is whacky. Side note - Go read about Japan's lost decade and you'll see how dangerously close our (US) current speculative investing environment is to theirs before it fell.