4 ms·

I don't know. Average PER should be around 15. Netflix is at PER 36 and there are doubts about the sustainability of their future growth. Amazon is at PER 56, a

• waych 5y ago
  PE Ratios are only comparable for like-kinded businesses, and are not indicative of anything on their own. There is no particular value they "should be", and a target of e.g. 15 is only an observed average of past behavior, often blended across many businesses (and therefore not a good indicator of anything). Consider the company that is regularly booking earnings, while another is spending all their revenue (and more) on investing for growth. The first will result in a lower PE, while the second will have a much higher PE all other things equal. Most growth companies are more similar to the latter, rarely booking earnings, and instead often raising capital or taking on debt to continue growth. For growth companies, Free Cash Flow analysis and understanding the balance sheet is typically a better way to understand performance and assess value.