So it is misleading to make conclusions from a PE ratio at any given time, simply because earnings for any particular quarter or even year is very situational.

So it is misleading to make conclusions from a PE ratio at any given time, simply because earnings for any particular quarter or even year is very situational. If for perfectly legitimate reasons (say to fuel growth) my earnings this quarter are $1, then my P/E ratio might be astronomical. In the context of pro-forma financials, taking out one time costs and special events, my P/E ratio is more telling. Amazon is a great example of this. There are quarters where AMZN has negative earnings. Does that mean that Amazon is overvalued? Not necessarily. Dig a bit deeper, take out things like acquisitions and restructuring costs for example, take earnings over time and that will give you a much stronger case to make a decision on valuation.