Humble opinion on P/E ratio

Whether the price-to-earnings ratio is "normal" depends on multiple factors, including industry, country, market conditions, and the specific situation of the company, so there is no fixed "normal" value.

1. General range:
   • In mature markets (e.g., the U.S.), a P/E ratio between 15 and 25 is generally considered a relatively reasonable range, especially for companies with stable growth.
   • Below 10 may indicate that the company is undervalued or has weak profitability.
   • Above 30 may imply high market expectations for future growth (e.g., tech stocks) or bubble risks.
2. Industry differences:
   • Due to high growth potential, tech industries (e.g., software, internet companies) may have P/E ratios of 30-50 or even higher.
   • Traditional manufacturing or utility companies, with slow growth, typically have P/E ratios between 10-20.
3. Market conditions:
   • P/E ratios are generally higher during bull markets and lower during bear markets.
   • If a company has stable earnings and promising growth, a higher P/E ratio may still be reasonable.
   • If earnings are volatile or the outlook is uncertain, a high P/E ratio may not be normal.