OPEN-SOURCE SCRIPT
Historical PE ratio vs median
The Trailing Twelve-Month Price-to-Earnings (TTM P/E) Ratio vs. Median Value Indicator is a financial analytical tool designed to assess the current valuation of a stock or index in comparison to its historical norm. This is achieved by calculating the P/E ratio using the sum of the entity's earnings per share (EPS) over the past twelve months and dividing it by its current share price. The resulting TTM P/E ratio is then compared against the median P/E ratio calculated over a specified historical period.
The median P/E ratio serves as a benchmark, representing the midpoint of the entity's valuation over the selected timeframe, thus smoothing out short-term volatility and anomalies. By comparing the current TTM P/E ratio to this median, the indicator provides a relative measure of whether the stock or index is currently overvalued, undervalued, or trading at its historical valuation norms.
The median P/E ratio serves as a benchmark, representing the midpoint of the entity's valuation over the selected timeframe, thus smoothing out short-term volatility and anomalies. By comparing the current TTM P/E ratio to this median, the indicator provides a relative measure of whether the stock or index is currently overvalued, undervalued, or trading at its historical valuation norms.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.