ATFXSharing: Is a negative P/E ratio good or bad? Pay attention to losses when investing

P/E ratio is a stock financial term used to analyze whether stock prices are undervalued or overestimated. Generally speaking, the P/E ratio is positive, but some investors find that the P/E ratio of certain listed companies is negative. Is a negative P/E ratio good or bad?

Is a negative P/E ratio good or bad?

It's a bad thing. Because the stock price to earnings ratio=The market value of a stock ÷ the annual net profit of a company. If the P/E ratio is negative, it means that the net profit of the listed company is negative, which means that the listed company has suffered losses in operation. This is bearish for the stock price, but of course, it is not that if the P/E ratio is negative, the stock will not rise. A low P/E ratio does not mean it will rise, and a high P/E ratio does not mean it will fall. But stocks with a negative P/E ratio are still advised to buy less.

What is the reasonable price to earnings ratio?

Generally speaking, the price to earnings ratio of a stock is14reach20Multiple is more appropriate, and the P/E ratio is within the normal range. If the P/E ratio is too low, it indicates that the stock is undervalued. If the P/E ratio is too high, it indicates that the stock is overvalued and there is a possibility of a decline in the stock price. However, the P/E ratio can only serve as a reference, and there may be deviations in the calculation of the P/E ratio, and the P/E ratios of different industries may also vary. It cannot be said whether a certain P/E ratio is reasonable, but it needs to be compared with other enterprises in the industry.

Overall, there are many factors that affect stock prices. You cannot analyze stock price trends solely based on one indicator, but should combine multiple aspects for comprehensive analysis. The above is all the content, and I hope it will be helpful to you.