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Here’s What PARKEN Sport & Entertainment A/S’s (CPH:PARKEN) P/E Ratio Is Telling Us

The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We’ll look at PARKEN Sport Entertainment A/S’s (CPH:PARKEN) P/E ratio and reflect on what it tells us about the company’s share price. PARKEN Sport Entertainment has a P/E ratio of 14.51, based on the last twelve months. That corresponds to an earnings yield of approximately 6.9%.

Check out our latest analysis for PARKEN Sport Entertainment

How Do I Calculate A Price To Earnings Ratio?

The formula for P/E is:

Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)

Or for PARKEN Sport Entertainment:

P/E of 14.51 = DKK101.50 ÷ DKK7.00 (Based on the year to September 2019.)

Is A High Price-to-Earnings Ratio Good?

A higher P/E ratio implies that investors pay a higher price for the earning power of the business. All else being equal, it’s better to pay a low price — but as Warren Buffett said, ‘It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price’.

How Does PARKEN Sport Entertainment’s P/E Ratio Compare To Its Peers?

The P/E ratio essentially measures market expectations of a company. We can see in the image below that the average P/E (20.9) for companies in the hospitality industry is higher than PARKEN Sport Entertainment’s P/E.

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