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Price-to-Book Ratio (PBR) | Web Scraping Tool | ScrapeStorm

2024-11-27 15:39:38

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Abstract：Price-to-Book Ratio (PBR) is one of the stock valuation metrics that shows how expensive or cheap a company's stock price is relative to its net asset value. ScrapeStormFree Download

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Introduction

Price-to-Book Ratio (PBR) is one of the stock valuation metrics that shows how expensive or cheap a company’s stock price is relative to its net asset value. PBR is specifically used to determine “the valuation of a company’s stock relative to the value of its accounting net assets.”

Applicable Scene

Stocks with a PBR of less than 1.0 mean that the company’s stock price is lower than its net assets (book value). Such stocks may be judged by the market as undervalued and investors tend to pay attention. For mature companies, the growth of net assets is stable, so PBR is an effective indicator for analyzing the market valuation of companies. Comparisons between companies in the same industry are used to determine whether a particular company is overvalued or undervalued compared to the industry average.

Pros: Stocks with a low price-to-book ratio usually mean that the company’s stock price is lower than its net assets (book value). Such stocks may be judged by the market as undervalued, providing potential buying opportunities. Net asset value can better reflect the overall strength and growth of a company than net profit. The price-to-book ratio indicator has a higher reliability in reflecting the intrinsic value of a company.

Cons: Book value may be affected by depreciation and other accounting treatments, and when accounting standards vary widely between companies, their P/B ratios may not be directly comparable. For service companies with fewer fixed assets, book value may lack practical meaning, so P/B ratios may not be applicable in the evaluation of these companies.