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Message: <blockquote data-quote="mamba" data-source="post: 9279297" data-attributes="member: 7034611">there is no right value for this as the company value always takes projected performance into account. If you want current value free of that, you are better off estimating how much money you have to invest to get the same interest as the company generates in profit. Whether anyone will sell it for that is another matter and in part depends on what they expect the future performance to be.As a tool by itself, you can e.g. check here[URL unfurl="true"]https://www.nerdwallet.com/article/investing/pe-ratio-definition#The%20drawbacks%20of%20PE%20ratio%20analysis[/URL]"“In the last 20 years, for example, the S&P 500 has seen PE ratios as low as 13 and as high as 123. While that high number of 123 might make it seem like the market is extremely valued, that ratio happened in the spring of 2009 — the beginning of one of the longest bull runs in U.S. history — so an investor who sold based on the high PE ratio would have missed out on all of those gains,” Sherman said in an email interview.“Using the PE ratio to take advantage of perceived under- or over-valuations in the market would require that the ratio always reverts to some historical average. The reality is that the PE ratio is not a great basis for investment decisions because there is simply no magic number to which the ratio tends to revert.”I have only really seen it used for a small business where the value was explicitly calculated as Earnings * number of years of remaining lease for the location as a baseline20 years seems a solid base for making your investment back, so 20 give or take 5 to me is a reasonable factor. Anything outside of that will have to factor in expected growth.</blockquote>

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