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A company with a high P/E is by definition not making much money for its shareholders, relative to the size of their investment. Unless you mean that the share
by snewman 2y ago
A company with a high P/E is by definition not making much money for its shareholders, relative to the size of their investment.
Unless you mean that the share price may appreciate. That's absolutely a thing, but it's a dangerous game. Of course plenty of people have made fortunes this way; people have also lost fortunes; I think the advice to steer away from such companies is basically a statement about risk.
- chii 2y ago> Unless you mean that the share price may appreciate. this has already happened because the P/E is high! Betting that it will continue to grow in price (aka, reach an even higher P/E) is risky.
- nightski 2y agoOr it means that earnings are lagging the price increase. They just announced a 629% increase in earnings from a year ago (461% non-gaap) and it seems to be accelerating.