A high Price-to-Earnings (P/E) Ratio generally indicates that the market has high expectations for a company's future earnings growth. Investors are willing to pay a higher price per dollar of current earnings in anticipation of future profits. P/E Ratio can vary widely across industries and tend to be highest for industries with high expected growth rates, like tech.
Learn Growth Rates with interactive examples and practice exercises in our Valuation module.
This interactive learning module helps you understand Growth Rates through hands-on practice and real-world examples.