Price-to-Book Ratio

Explanation

P/B = Market Price Per Share / Book Value Per Share. A P/B below 1.0 means the market values the company below its accounting net worth — potentially a value opportunity or a sign of distress. P/B is most useful for asset-heavy industries: banks (average P/B around 1.0-1.5x), REITs, and utilities. It's less useful for asset-light companies (software, services) whose value comes from intangible assets not captured on the balance sheet. P/B is a key component of the value factor in academic finance (Fama-French HML).

Formula

How Stoquity Uses This

Stoquity incorporates price-to-book ratio analysis across its portfolio management platform, providing real-time monitoring and AI-powered insights for every portfolio.