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REDDIT

Why is PE ratio not normalized?

G
Mar 28, 2025 · 00:44

It always irritates me that the PE ratio (or other ratios based on share price) is a popular metric for comparing stocks since the number of shares issued can vary greatly. It strikes me as taking advantage of average retail investors. Is there a reason Cap/Earnings or something similar is not better in almost every situation? Is there something I am missing?