P/E valuation

so I’m trying to get this straight and somehow it does not make sense. adjusted P/E - 27.1x justified P/E - 15x Indicate whether the company is over/undervalued based on the justified methodology relative to adjusted P/E. The ans is since 15<27.1 the stock is overvalued. How come?

well justified p/e shows you that is the fair value of the indicator for p/e we know the lower the better if justified is 15 that means that anything above that is too much so overvalued

florin, that is my understanding that higher P/E implies (high price or low E)… think the question should be re-worded, since what they ask is if adjusted is over/undervalued compared to justified. this brings it back in order… :slight_smile:

Justified is what It should IDEALLY be. So the P/E ideally should be 15. But the market or the calculated P/E comes out to be 27.1 So the stock is overvalued

dinesh has got it

got it. thanks dinesh & florin…