| Dictionary, Encyclopedia and Thesaurus - The Free Dictionary 3,899,124,846 visitors served. |
Dictionary/ thesaurus | Medical dictionary | Legal dictionary | Financial dictionary | Acronyms | Idioms | Encyclopedia | Wikipedia encyclopedia | ? |
Multiple Compression |
0.01 sec. |
|
|
Multiple Compression A situation in which a publicly-traded company's share price does not rise, or may fall, even on strong earnings. That is, multiple compression occurs when the price-earnings multiple falls. Multiple compression is usually the result of investors' skepticism on growth prospects. Generally, investors buy stocks with high price-earnings ratios if they are confident in high, future growth; when multiple compression occurs, it may indicate that investors believe that growth rates are leveling off, and that the company is unlikely to grow much more. To an extent, this is a positive sign, as it shows confidence that the company has become well-established, but, on the other hand, it may be a sign that investors believe the company's stock is overvalued.
Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
|
| Financial Dictionary |
| Free Tools: |
For surfers:
Free toolbar & extensions |
Word of the Day |
Help
For webmasters: Free content | Linking | Lookup box | Double-click lookup |
|---|