Business, Legal & Accounting Glossary
This occurs when, although earnings are strong, the price of a particular stock does not move up – and in some cases, it can even go down. This results in a reduction in the P/E ratio for the stock, even though there is nothing wrong with the underlying company. Therefore, some feel that this compression can call the company’s valuation into question.
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This glossary post was last updated: 20th November, 2021 | 0 Views.