A "N/A" reported in a stock's price-to-earnings ratio (P/E), can mean one of two things. The first, and simplest, would be that there is no data at time of reporting to calculate this ratio. This will be the case with a newly listed company that has yet to release its earnings. The second reason that a stock would report "N/A" as its P/E ratio could be that the number is negative. Negative P/E ratios are mathematically possible, but because they are generally not accepted by the financial community, they are usually reported as "N/A," or not applicable.

The P/E ratio is calculated as the stock's current price divided by its earnings per share (EPS). Obviously, it is not possible for a stock to have a negative price, so the negative P/E ratio comes from the EPS of the company being negative (i.e. net loss). Investors can interpret seeing the "N/A" as the company reporting a net loss, and should be aware they are buying shares of a company that is losing money per share of its stock.

To learn more, see our Understanding the P/E Ratio tutorial or Can a stock have a negative price-to-earnings (P/E) ratio?.

This question was answered by Ayton MacEachern.

  1. How can EV/EBITDA be used in conjunction with the P/E ratio?

    Because they provide different perspectives of analysis, the EV/EBITDA multiple and the P/E ratio can be used together to ... Read Full Answer >>
  2. What is the average price-to-earnings ratio in the retail sector?

    According to NYU's Stern School of Business, as of January 2015, using trailing 12-month data, the average price-to-earnings ... Read Full Answer >>
  3. What metrics are commonly used to evaluate companies in the retail sector?

    Some of the most commonly used metrics to evaluate companies in the retail sector include the price/earnings to growth (PEG) ... Read Full Answer >>
  4. What is the average price-to-earnings ratio in the food and beverage sector?

    The food and beverage sector includes diverse groups of companies specializing in producing different foods and beverages ... Read Full Answer >>
  5. What is the average price-to-earnings ratio in the automotive sector?

    As of January 2015, the current price-to-earnings, or P/E, ratio was 15 for auto manufacturers and 20 for auto parts manufacturers. ... Read Full Answer >>
  6. What is the formula for calculating the price-to-earnings (P/E) ratio in Excel?

    The price-to-earnings ratio, or P/E ratio, is a valuation ratio used in fundamental analysis. The ratio compares a company's ... Read Full Answer >>
Related Articles
  1. Stock Analysis

    Coca-Cola Vs. PepsiCo: Which Stock Should You Buy?

    Learn about the bull case for Coca-Cola and PepsiCo. Find out which is more attractive for investors, and learn about the strengths of each company.
  2. Investing

    2 Sectors to Explore When Rates Rise

    While the market selloff and declining inflation expectations have lowered the probability of a Fed rate rise, U.S. economic data still supports it.
  3. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI US 1000

    Find out about the PowerShares FTSE RAFI U.S. 1000 ETF, and explore detailed analysis of the fund that invests in undervalued stocks.
  4. Stock Analysis

    3 Reasons to Short Monster Beverage

    Learn why, despite the popular perception of Monster Beverage as a high-growth stock, investors may be better off taking a short position on it.
  5. Investing

    Finding Value in the Selloff Rubble

    Globally and in the United States, stocks are now in correction mode, with the recent erosion in equities in emerging markets and Europe in a bear market.
  6. Stock Analysis

    4 Cybersecurity Value Stocks to Watch For

    Discover how huge data breaches to major companies have caused an upswing in the cybersecurity industry, and top stocks investors should watch.
  7. Investing

    No Solace in Small Caps

    In the U.S., second-quarter earnings season has generally been better than expected. However, it has failed to inspire investors.
  8. Stock Analysis

    Who's The Stronger Stock: Amazon or eBay?

    Learn how revenue, profitability, valuation metrics, active user base and seller ratings measure the success of Amazon and eBay.
  9. Investing

    What More Volatility Means For Momentum Stocks

    One byproduct of the recent tick higher in bond yields: a meaningful rise in volatility for both stocks and bonds.
  10. Fundamental Analysis

    Key Financial Ratios for Pharma Stock Investing

    Analysts simplify the business of investing in pharma by studying key financial ratios and metrics. Know these metrics before you buy or sell pharma.
  1. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing ...
  2. P/E 10 Ratio

    A valuation measure, generally applied to broad equity indices, ...
  3. Abnormal Earnings Valuation Model

    A method for determining a company's worth that is based on book ...
  4. Franchise P/E

    The expected value of new business opportunities available to ...
  5. P/E 30 Ratio

    The price-to-earnings (P/E) ratio is the valuation ratio of a ...
  6. Price/Earnings To Growth - PEG Ratio

    Price/Earnings to Growth (PEG) is a stock's price to earnings ...

You May Also Like

Hot Definitions
  1. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  2. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  3. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  4. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  5. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  6. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!