Good PE ratios vary by industry, helping investors assess if a stock is fairly priced. They reflect the balance between stock price and earnings, considering growth and risks.
PE Ratio indicates a stock's value to earnings, showing how much investors pay for each rupee of profit. A high ratio may imply overvaluation; a low ratio suggests undervaluation.
To calculate the P/E ratio, divide the stock's current market price by its earnings per share (EPS), comparing the price investors pay to the company's earnings.