What does PE 5-year percentile mean?

In finance, the PE 5-year percentile refers to the price-to-earnings (PE) ratio of a stock or index compared to its historical performance over the past five years. The PE ratio is a measure of a company's stock price relative to its earnings per share, and it is commonly used to evaluate the valuation of a stock or market index. The PE 5-year percentile provides investors with a way to understand how the current PE ratio of a stock or index compares to its own historical range over the past five years. This can help investors to assess whether the current valuation is relatively high or low compared to its historical average. For example, if a stock's current PE ratio is at the 90th percentile of its 5-year range, it may be considered as relatively expensive, whereas if it is at the 10th percentile, it may be considered as relatively cheap. By looking at the PE 5-year percentile, investors can gain insights into the valuation of a stock or index and make more informed decisions about whether to buy, sell, or hold their investments. It can also be used as a tool for identifying potential investment opportunities or risks based on historical valuation patterns.