The Most Misunderstood Metric In Finance - The P/E Multiple

Most investors misuse the P/E ratio. Here’s what the multiple actually means, why it’s often misunderstood, and how to use it correctly in valuation.

Most investors talk about the P/E multiple like it’s a universal truth handed down on stone tablets. CNBC flashes it like gospel, their own explainer on the metric treats P/E as a kind of default val…