1YPEG - Where does the P come from?

Saul,
A while ago you posted an EPAM example for calculating 1YPEG. I can’t find the post, but it isn’t important. Your example worked through how to find the earnings and calculate growth but then you calculated PE by introducing the price of $66.60 resulting in a PE of 30.0 . . .

With prices fluctuating every day, sometimes a lot, how did you determine that $66.60 was the one to use for PE? Was is just the most recent close, current value of a moving average, or what?

Thanks, br

With prices fluctuating every day, sometimes a lot, how did you determine that $66.60 was the one to use for PE? Was is just the most recent close, current value of a moving average, or what?

Hi Brittlerock, Yes, PE’s change every day, even every minute, depending on the price of the stock ---- as PE ratio means price divided by earnings. that was just the price at the previous close. However, you don’t have to worry much about it. If a company has a PE of 25.0 for instance, and the price moves by 1.2%, say, which is a pretty respectable one day move, the PE will go to 25.3, and that’s not going to make any difference to any decision you are about to make about the stock.

Saul

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