If a stock has a low p/e and high p/s(relative to its industry/sector)…what would you conclude?

[nik1]

@harmonius So what would you conclude?

 

[harmonius]

@nik1 I would conclude that you are calculating your ratios incorrectly if you are getting PE = PS.

As for having higher margins than its industry peers, that can mean a lot of things. It can mean they have different accounting, it can mean one is run more efficiently. It can mean one is able to charge higher prices for some reason, like stickier or less-powerful customers, or a better brand name.

 

[nik1]

@harmonius The examples are real stocks I pulled from publicly available sources. Those are the real values. I didn’t use the stock ticker because I thought it would cause some bias. I’m legitimately trying to figure this out.

 

[nik1]

@harmonius I’m not calculating anything.

 

[harmonius]

@nik1 Guy, the math. It is not possible. Whatever source you are using is either calculating it wrong or using two different time periods for the S and E, making the multiples not comparable.

Try calculating it yourself. Look at NVDA’s revenue, then look at its net income. They are different numbers. So how can Price/Sales be equal to Price/Earnings?

 

[nik1]

@harmonius It’s fwd p/e. So nvda’s next 12 months of earnings are equal to its last 12 months of sales?

 

[sviar]

@nik1 That is very relevant information that should have been included in your question.

I would conclude that people expect their revenue to go up and/or their expenses to go down