What does a low P/E for a stock indicate?
A) People may expect earnings to fall in the future perhaps because the firm will be faced with increased competition.
B) Its dividends have been low so that no one is willing to pay very much for it.
C) The corporation is possibly overvalued.
D) It is always a good time for buying the company's stock.

Question

Quizplus · Accepted Answer

A low P/E ratio may indicate that investors expect earnings to decrease in the future, possibly due to increased competition or other factors that could negatively impact the company's profitability.

What Does a Low P/E for a Stock Indicate