Intermediate5-8 min readTopic 5 of 7

    Valuation Ratios — Is the Stock Cheap or Expensive?

    Rohit Singh

    Mr. Chartist · SEBI RA

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    What you'll learn

    1P/E Ratio (Price-to-Earnings) = Market Price / EPS. The most widely used metric. NIFTY historical average P/E
    2Forward P/E
    3PEG Ratio = P/E / Earnings Growth Rate. PEG < 1 = stock is growing faster than its valuation implies (attractive). PEG > 2 = overvalued relative to growth
    4P/B Ratio (Price-to-Book) = Market Price / Book Value Per Share. Important for banks and asset-heavy companies. P/B < 1 = trading below asset value (deep value territory)

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