---
type: "Topics"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/topics/32584619.md"
description: "Why does a stock split affect the P/E ratio?A stock split (also known as a share split) refers to a company increasing its existing shares proportionally (e.g., a 1:2 split turns 1 share into 2 shares) while proportionally reducing the stock price (e.g., from $100 to $50). However, the company's total market capitalization and fundamentals (such as total earnings) remain unchanged. The price-to-earnings (P/E) ratio is the ratio of the stock price to earnings per share (EPS), used to evaluate stock valuation. In theory, a stock split should not change the P/E ratio because the stock price and EPS adjust proportionally. However, it may "affect" the P/E ratio for the following reasons:Apparent calculation changes:After a split, the stock price immediately drops. If data sources (e.g., trading systems) do not update EPS promptly, the P/E ratio may appear to decrease or increase, creating a "false impact." For example, delayed EPS adjustments may temporarily distort the P/E ratio.In actual trading, splits can affect market prices and share quantities, which may impact the real-time display of the P/E ratio, especially during pre-market or after-hours trading or when there are data delays.Market psychology and liquidity effects:After a split, the lower stock price may attract more retail investors, increasing trading activity and demand. This indirectly causes short-term fluctuations in the P/E ratio, as market sentiment may drive up the stock price (thus affecting P/E), even though the company's value remains unchanged.Changes in liquidity (e.g., order execution issues) may also affect price discovery, thereby impacting the P/E ratio.Long-term orders and calculation inaccuracies:Corporate actions like stock splits terminate long-term orders and may lead to inaccurate cost basis calculations. If the P/E ratio is based on such inaccurate data (e.g., historical cost), it may display anomalies.Summary: A stock split does not change a company's intrinsic value, so the P/E ratio should theoretically remain unchanged. However, in reality, due to data delays, market behavior, or system adjustments, it may exhibit short-term "effects." Investors should focus on post-split EPS updates and fundamentals rather than just superficial P/E ratio changes."
datetime: "2025-08-04T14:32:05.000Z"
locales:
  - [en](https://longbridge.com/en/topics/32584619.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/32584619.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/32584619.md)
author: "[嘿嘿^](https://longbridge.com/zh-HK/profiles/16808539.md)"
---

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# Why does a stock split affect the P/E ratio?A stoc…


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## 評論 (1)

- **嘿嘿^ · 2025-08-04T14:35:27.000Z · 👍 1**: Have done the numbers, stock splits have caused big drops, stock splits increase liquidity, and sentiment is high. P/E ratio is inaccurate.