What does a -35 p/e ratio mean?

[vi edit]

It's bad right? Really bad?

 

[HappyPuppy]

Never seen a negative PE ratio. This should be interesting.

 

[MikeMike]

how do you havve a -35 p/e ratio is my question. maybe 35 but, -35?? that really does not make sense.

p/e = price to earnings (for the uninformed)

MIKE

 

[deftron]

Yes, Enron stock is a bad idea

 

[vi edit]

Well, I saw this in an industry news magazine for my particular industry. Every month they post the stock info and p/e ratios of the top 100 companies in this market. The p/e's ranged anywhere from -42 (lowest) to 140'ish.

A company I have an interest in was at -35.

 

[dolph]

the p/e ratio is equal to a stock's market capitalization divided by its after-tax earnings over a 12-month period. if a company has negative earnings (meaning it's unprofitable), the p/e ratio *can* be shown as being negative. a low p/e either means the stock is cheap or the company sucks. high means the stock is expensive.

 

[SoyBoy004]

Originally posted by: dolph
the p/e ratio is equal to a stock's market capitalization divided by its after-tax earnings over a 12-month period. if a company has negative earnings (meaning it's unprofitable), the p/e ratio *can* be shown as being negative. a low p/e either means the stock is cheap or the company sucks. high means the stock is expensive.

what he said.

 

[kranky]

Even though it's possible to compute a P/E for a company with losses, it doesn't have much meaning. A lot of places would list it as "N/A" instead of showing a -35 P/E.