S&P 500 P/E Ratio Quarterly Trends: S&P 500 Earnings (2024)

FAQs

What is a good PE ratio for S&P 500? ›

Typical value range is from 20.26 to 28.38. The Year-Over-Year growth is 15.87%. GuruFocus provides the current actual value, an historical data chart and related indicators for S&P 500 PE Ratio - last updated on 2024-09-06.

For Q2 2025, analysts are projecting earnings growth of 14.1% and revenue growth of 5.7%. For CY 2025, analysts are projecting earnings growth of 15.4% and revenue growth of 6.0%. The forward 12-month P/E ratio for the S&P 500 is 20.6.

S&P 500 P/E Ratio Forward Estimate is at a current level of 22.56, down from 23.40 last quarter and down from 26.39 one year ago. This is a change of -3.59% from last quarter and -14.52% from one year ago.

Trailing Twelve Months (TTM) PE: TTM PE is the current share price divided by the last 4 quarterly EPS. TTM PE is easy to calculate because companies declare the financial results including EPS every quarter. Forward PE: Forward PE is the current share price divided by the projected EPS over the next 4 quarters.

Typically, the average P/E ratio is around 20 to 25. Anything below that would be considered a good price-to-earnings ratio, whereas anything above that would be a worse P/E ratio. But it doesn't stop there, as different industries can have different average P/E ratios.

The price-to-earnings ratio (P/E ratio) is a quick way to gauge whether a stock is undervalued or overvalued. All else equal, the lower the P/E ratio, the better the investment. For this reason, a P/E of less than 20x is “good” and anything higher than 30x is “bad.”

Industry analysts in aggregate predict the S&P 500 will report year-over-year earnings growth of 11.3% in 2024 and 14.4% in 2025.

Basic Info

S&P 500 Earnings Yield is at 3.64%, compared to 4.03% last quarter and 4.26% last year. This is lower than the long term average of 4.70%.

"While stocks should stabilize in the near term, the medium-term direction is to the downside," writes BCA. "We continue to expect the US to enter a recession in late-2024 or early-2025." "We expect the S&P 500 to drop to 3750 in 2025 and the 10-year Treasury yield to fall to 3%," BCA adds.

While P/E ratios are not the magical prognostic tool some once thought they were, they can still be valuable when used the properly. Remember to compare P/E ratios within a single industry, and while a particularly high or low ratio may not spell disaster, it is a sign worth taking into consideration.

What is the best forward PE ratio? ›

In general, a good Forward P/E ratio has the same ranges as a good P/E, between 10-25 is a good P/E for most stocks. This is because stocks with a Forward P/E below 10 can often be a value trap, and those above 25 can often be too expensive because they are priced with unreasonably high growth expectations.

Tesla's Forward PE Ratio for today is 71.93. Tesla's PE Ratio without NRI for today is 101.23.

S&P 500 P/E Ratio is at a current level of 27.45, up from 24.79 last quarter and up from 23.46 one year ago. This is a change of 10.76% from last quarter and 17.03% from one year ago.

The P/E equals the price of a share of stock, divided by the company's earnings-per-share. It tells you how much you are paying for each dollar of earnings. Low or high P/E ratios aren't inherently good or bad.

The justified P/E ratio is used to find the P/E ratio that an investor should be paying for, based on the companies dividend and retention policy, growth rate, and the investor's required rate of return. Comparing justified P/E to basic P/E is a common stock valuation method.

A P/E of 30 is high by historical stock market standards. This type of valuation is usually placed on only the fastest-growing companies by investors in the company's early stages of growth. Once a company becomes more mature, it will grow more slowly and the P/E tends to decline.

If a stock's price rises, you need to pay close attention when a stock gets bid up to an excessively high P/E level. In the heat of a bull market, it's not uncommon to find "hot" stocks trading at a P/E of 50 or more. While this can go on for some time, eventually the stock's price may drop.

Usually, the market considers a P/E ratio below 20 as a good investment opportunity. 3. What if PE ratio is 40? A high P/E ratio, above 40, indicates investors willing to buy a stock at 40 times or more its earnings.

Although eight is a lower P/E, and thus technically a more attractive valuation, it's also likely that this company is facing financial difficulties leading to the lower EPS and the low $2 stock price. Conversely, a high P/E ratio could mean a company's stock price is overvalued.