For this question we will be using P/E ratio.

To find a company’s P/E ratio, use www.morningstar.com , enter the desired stock symbol to get to the company’s front page.  The P/E ratio is listed on the company’s front page.

Compare the P/E ratio of your company, APPLE INC, with the industry average or with major competitors. Is there a difference between these numbers? Is the stock overvalued, undervalued, or properly valued? Why?  In accordance with your findings, is it reasonable to buy the stock?

EVALUATION OF P/E RATIO