P/E – Price to earnings ratio. The stock price is divided by the company’s earnings—market value per share / Earring price per share. The typical Price per earnings is the TTM or the trailing 12 months earnings per share.
P/B – Price to book ratio. The stock price per share is divided by the equity per share of the company. The company’s underlying equity is the total assets minus total liabilities on the balance sheet. A book value less than one could mean the market has misunderstood or wrongly valued the assets, and it also could signal lousy management.
P/S – Price to sales ratio. Market value per share divided by sales pre-share. It doesn’t show if the company is profitable, but combined with earnings, you can see if there have a healthy revenue stream and is undervalued. Sales are challenging to manipulate, so this is an excellent ratio to consider. When you see an extremely high price per sale, the market expects incredible growth. Ten times price per earnings is an insane valuation. The company would have to pay you 100% of revenues for the next ten years, assuming limited growth. The underlying assumption is they pay no tax, no employees, no cost of sales, and without spending money on R&D, can maintain the sales number. It is incredibly speculative.