Mag 7 PE < 20? How Much More Downside is There?

WallStreet_Tiger
04-07

After this market bloodbath, let's take a look at how the forward PE ratios of the Mag 7 are performing.

Two companies from the Mag 7, $Alphabet(GOOG)$ and $Amazon.com(AMZN)$ , have reached historic low PEs.

Google’s PE has dropped below 20, while Amazon stands at 27.07.

$NVIDIA(NVDA)$ is only 13% away from its historical lowest PE, and if it falls to $83, its stock price will reach the lowest forward PE in the past 10 years.

$Microsoft(MSFT)$ , $Meta Platforms, Inc.(META)$ , and $Apple(AAPL)$ are still far from their historical lows, but Meta’s forward PE has already dropped below 20, currently at 19.87.

$Tesla Motors(TSLA)$ is currently the highest valued company in the Mag 7, with a 202% gap to its historical lowest PE.

However, we cannot only focus on forward PE. Google’s valuation has been low for the past two years due to market concerns about AI replacing Google Search; while Tesla enjoys a high valuation for reasons we all know.

Do you believe in the PE indicator?

Besides PE, do you look at other metrics?

What is your target price for bottom fishing?

# Mag 7 Jumps Over 10%! Take Profits or Keep Holding?

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Comment（4）

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  • Humbly
    ·04-07
    TOP
    The unknown question is whether there will be a deep recession, which will slash all the forward EPS estimates
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  • BenjiFuji
    ·04-08
    TOP
    PE is just a single indicator that looks at how price is versus earnings. We need to look deeper into why the earnings is such and what is driving the price story. I look at a whole lot of other indicators of which it depends on the type of company and the circumstances. [Grin]
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  • Reallyxxx
    ·04-07
    All fine if the “E” does not change. Right now that seems a rather ambitious assumption isn’t it?
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  • SuperDuper1
    ·04-07
    The problem is that the street hasn’t shaved EPS estimates yet
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