The P/E ratio itself doesn’t tell you a lot, but, it becomes terribly perceptive once you compare it with alternative similar firms. We ideally need to check the stock’s P/E ratio to the typical of firms that have similar options to AVG, resembling capital structure and profitableness. A fast technique of making a contemporaries is to use firms within the same trade that is what I will be able to do. Since it’s expected that similar firms have similar P/E ratios, are able to return to some conclusions concerning the stock if the ratios are totally different. AVG’s P/E of 94.5x is more than its trade peers (38.8x), which suggests that every greenback of AVG’s earnings is being overvalued by investors. Therefore, in step with this analysis, AVG is an over-priced stock.