how do figure out a pe of a stock?

Answer 1

Stock price/EPS (earnings per share)

Go to http://finance.yahoo.com/q?ei=utf-8&fr=slv8-&d=v1&s=GE
to see General Electric, and where we get the numbers (Foreware PE is towards the bottom on the right side)

Example: General Electric is currently $37.36 per share. It is estimated they will earn 1.645 for the year (it is an estimate because no company can ever accurately forsee the future. GE probably expects full-year earnings of $1.55-$1.70 per share, and $1.645 is the analysts average guess)
Now divide 37.36 by 1.645
37.36/1.645
That gives you 22.71. (which is their current PE)

Now if you want to figure out a foreward EPS, you need similiar info. But what if you are given the foreward PE and NOT the earnings per share (EPS?)
Take the share price $37.36 and divide it by 16.68 (16.88 is the foreware PE)
$37.36/16.68 = 2.24
So GE is going from making $1.65 per share to $2.24 per share. Not too shabby...
We were able to tell that GE was going to be making more money next year even though we WERE NOT given the EPS. You can see they were making more $$$ because their PE ratio was LOWER than the previous year, which means their earnings are HIGHER.

Answer 2

Take the price of the stock and divide it by the earnings per share of the stock. That statistic is readily published for all stocks that have earnings.

But maybe your question relates to whether the pe is an indication of whether the stock is a good value or not. That question is of continual interest to potential investors. And to tell you the truth, I do not know the answer. I do know however that if a stock sports a pe above about 20, it can be a very risky investment. The average pe of the S&P 500 is about 17. There are certain stocks that tend to support high pe values. They are generally perceived growth stocks such as Yahoo with a pe of 35 and Google with a pe of about 60.

Another interesting statistic is peg ratio. That is the pe divided by the projected growth rate for 5 years out. If the peg ratio is less than 1.0 the stock is considered a bargain. If it is greater than 2.0, the stock is consider overpriced. Beats me why there are so many stocks at both ends of the spectrum. Maybe the projected growth rates are out of line one way or the other. And maybe investors do not know the value of a company.

Answer 3

PE of a stock is called the Price Earnings ratio. It is the Market price of the stock divided by the Earnings per share of the stock. It shows how many times the earnings is multiplied to get the price of the stock. It is an indicator of how the market appreciates a stock. Also, some analysts take the reciprocal of this to get a quick view of the Return on Investmetn of a company.

Answer 4

Price per share of stock (divided by) earnings per share. Most Finance sites that provide stock quotes will calculate and display the PE too.

There is also Forward PE, where you can divided by the anticipated earnings, generally for the next 12 months.

For more information about common financial data, check out Yahoo! Finance Help: "What does all this data mean?"

http://help.yahoo.com/l/us/yahoo/finance/quotes/quote-03.html

Thx,

/d

Answer 5

Search for stock ratings companies. Morningstar comes to mind.

Answer 6

Current share price divided by forward earnings (i.e., anticipated earnings for the next 12 months)

Answer 7

Hi, i suggest a great site with plenty of Issues related to your Investing and everything around it. it also provide clear and accurate answer to many common questions.

http://investing.sitesled.com/

I am sure that you can get your answers in this website.

Good Luck and Best Wishes!

Answer 8

No clue search it online on a website they should know about that stuff.