Understanding valuation metrics, like price-to-earnings ratios, helps investors gauge what they’re paying for company earnings.
Historical Stock Market Valuations The S&P 500’s forward P/E is 22.4x (vs. 15.9x long-term average), above normal but below the tech bubble peak of 24.5x. The Shiller P/E of 38x also exceeds its historical average of 27x, pointing to elevated valuations. Large Cap Growth stocks trade at the highest P/E (28x) with 16.1% expected earnings […]