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It sets a lower bound on the P/E ratio at which money is being invested, no?
by teaspoon 15y ago
It sets a lower bound on the P/E ratio at which money is being invested, no?
- dereg 15y agoYes, you may have a really (REALLY) rough idea of the lower bound of the P/E ratio. However, the going concern is that it is over- not under-valued, so that estimate is useless. Also, we (I) have no idea of what their net income picture looks like, so the upper bound of the P/E could be in the clouds. Last, P/E valuation is useful insofar that we can compare it to its competitors.