Finance Flash Go! Episode #79: Understanding Stock P/E Ratios

On this episode of the Finance Flash Go! podcast, we’re talking about stock P/E ratios.

Listen to the full episode and subscribe here!

The P/E ratio helps investors determine the market value of a stock as compared to the company’s earnings. In short, the P/E shows what the market is willing to pay today for a stock based on its past or future earnings.

A high P/E could mean that a stock’s price is high relative to earnings and possibly overvalued. Conversely, a low P/E might indicate that the current stock price is low relative to earnings.

However, companies that grow faster than average typically have higher P/Es, such as technology companies. A higher P/E ratio shows that investors are willing to pay a higher share price today because of growth expectations in the future.

stock P/E

The average P/E for the S&P 500 has historically ranged from 13 to 15. For example, a company with a current P/E of 25, above the S&P average, trades at 25 times earnings.

Related posts:
How to Find the Perfect Balance Between FIRE & YOLO
5 Easy Steps for Physicians Who Hate Personal Finance
Finance Flash Go! Episode #45: Small Cap vs. Mid Cap vs. Large Cap Stocks
My Stock Portfolio Is Better Than Your Financial Advisor’s
Stress Free Stock Market Investing Is Easier Than It Seems!
Important Money Lessons That I Learned From My Wife
Finance Flash Go! Episode #44: Understanding Growth vs. Value Stocks

I really hope that you all enjoy the Finance Flash Go podcast! We plan to release a new episode every weekday answering important finance questions. If you ever want to submit a question to our podcast, send an e-mail to [email protected].

And please subscribe and give us a 5-star rating if you enjoy the podcast! It helps us continue our mission of helping all of us to achieve financial well-being!

Love the blog? We have a bunch of ways for you to customize how you follow us!

Join the Prudent Plastic Surgeon Network

And accelerate your path to financial freedom with my free FIRE calculator!

We won’t send you spam. Unsubscribe at any time.

Join The Prudent Plastic Surgeon Facebook group to interact with like-minded professionals seeking financial well-being

The Prudent Plastic Surgeon

Jordan Frey MD, a plastic surgeon in Buffalo, NY, is one of the fastest-growing physician finance bloggers in the world. See how he went from financially clueless to increasing his net worth by $1M in 1 year  and how you can do the same! Feel free to send Jordan a message at [email protected].

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts

April 17, 2025

PhREI Network Roundup 4-17-25: The Tax Benefits of Real Estate Syndications

As you know, as part of the PhREI network, we decided to start a weekly roundup to share new activity from across the network. Enjoy! The

April 16, 2025

The Important Differences Between a Mutual Fund and Target Date Fund

Target date funds are great. But they are not the same as a traditional mutual fund. And these differences between a mutual fund and a

April 15, 2025

Finance Flash Go! Episode #74: YOLO Investing

Today on the Finance Flash Go! podcast, we talk about YOLO investing. Listen to the full episode and subscribe here! YOLO investing means You Only