## What is the Use of P/E Ratio? Valuation Secrets Every Investor Should Know
### Key Points
- The P/E ratio reflects the price investors are willing to pay for each dollar of earnings from a company, serving as a quick tool to assess whether an asset is overvalued or undervalued.
- Different types of P/E ratios (trailing, forward, absolute, relative) each have their own focus and need to be understood in conjunction with industry background and growth potential.
- Most crypto assets are not suitable for P/E ratios, but DeFi platforms generate fee income, and some metrics are in the explorator
View Original### Key Points
- The P/E ratio reflects the price investors are willing to pay for each dollar of earnings from a company, serving as a quick tool to assess whether an asset is overvalued or undervalued.
- Different types of P/E ratios (trailing, forward, absolute, relative) each have their own focus and need to be understood in conjunction with industry background and growth potential.
- Most crypto assets are not suitable for P/E ratios, but DeFi platforms generate fee income, and some metrics are in the explorator