#Price-Prediction #PriceActionAnalysis

What is the Price-Earnings (P/E) ratio?

The P/E ratio indicates how much investors are willing to pay for each dollar of a company's earnings, serving as a quick way to assess whether an asset is overvalued or undervalued.

There are different types of P/E ratios — such as trailing, forward, absolute, and relative — that offer various perspectives, but all require context, such as industry standards and the company's growth potential.

The P/E ratio does not work well for cryptocurrencies because most of them do not generate profits and reports in the same way that companies do. However, similar valuation methods are being tested in some areas of decentralized finance (DeFi).