Price-to-earnings ratio relative to earnings growth rate
factor.formula
Price-to-earnings ratio (TTM)
The P/E ratio (Trailing Twelve Months, TTM) refers to the ratio of a stock's current price to its earnings per share over the past 12 months. It is a commonly used indicator for measuring stock valuation levels, reflecting how much investors are willing to pay for each unit of earnings. The TTM P/E ratio uses earnings data from the past 12 months and better reflects a company's current profitability.
Net profit attributable to the parent company (TTM) year-on-year growth rate
The year-on-year growth rate of net profit attributable to the parent company (TTM) refers to the growth rate of net profit attributable to the parent company's shareholders in the most recent 12 months relative to the net profit in the same period last year. It reflects the growth rate of the company's profitability and is an important indicator for measuring the company's growth potential.
The P/E ratio relative to earnings growth rate can be understood as the ratio of the P/E ratio (TTM) to the year-on-year growth rate of net profit attributable to the parent company (TTM). This indicator is not a direct division, but usually observes the relative relationship between the two rather than an accurate calculation to determine whether there is sufficient earnings growth support under a high P/E ratio.
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Price-to-earnings ratio (TTM), the ratio of the current stock price to the earnings per share in the last 12 months.
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The year-on-year growth rate of net profit attributable to the parent company (TTM) refers to the growth rate of net profit attributable to shareholders of the parent company in the last 12 months relative to the net profit in the same period last year.
factor.explanation
This factor determines the valuation level of a stock by comparing the relative size of the price-to-earnings ratio and the earnings growth rate. If a stock has a high price-to-earnings ratio but a low earnings growth rate, it may indicate that the stock is overvalued and there is a risk of a price correction. On the contrary, if a stock has a low price-to-earnings ratio and a high earnings growth rate, it may indicate that the stock is undervalued and has a high investment value. When using this factor, investors should consider the industry characteristics, company fundamentals, and macroeconomic factors.