PE Ratio
Basics
- From Investopedia (30-5-2020):
"The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
P/E ratios are used by investors and analysts to determine the relative value of a company's shares in an apples-to-apples comparison. It can also be used to compare a company against its own historical record or to compare aggregate markets against one another or over time."
"While many of these protocols are generating revenues, not all of it (if any) accrues to the protocol’s native token - an important distinction to recognize when valuing these assets. Price to earnings (P/E) is the profit that is accrued to the protocol’s token whereas Price to Sales (P/S) is the revenue generated from usage of the protocol at large."
