Think Nvidia Stock Is Expensive? These 3 Members of the S&P 500 Trade at Even Higher Valuations.

Is Nvidia (NASDAQ: NVDA) stock overvalued? This question, while simple on the surface, is extraordinarily hard to answer.Many investors use a valuation metric called a price-to-earnings (P/E) ratio. This popular metric is useful because it measures the stock price against a company's profits. And in Nvidia's case, its P/E ratio of 57 certainly looks expensive, considering it's roughly double the P/E ratio for the S&P 500.Then again, context is important. Nvidia stock might look expensive now. But it actually trades at a steep discount to its average P/E ratio valuation over the last five years, as the chart below shows.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool