in the current session synovus finl inc nysesnv is trading at 4595 after a 106 gain over the past month the stock increased by 1408 and in the past year by 9270 with performance like this longterm shareholders are optimistic but others are more likely to look into the pricetoearnings ratio to see if the stock might be overvalued assuming that all other factors are held constant this could present itself as an opportunity for shareholders trying to capitalize on the higher share price the stock is currently below from its 52 week high by 903 the pe ratio is used by longterm shareholders to assess the companys market performance against aggregate market data historical earnings and the industry at large a lower pe can either represent a companys poor future earnings potential or a buying opportunity relative to other stocks it shows that shareholders are less than willing to pay a high share price because they do not expect the company to exhibit growth in terms of future earnings depending on the particular phase of a business cycle some industries will perform better than others compared to the aggregate pe ratio of the 1568 in the banks industry synovus finl inc has a lower pe ratio of 1166 shareholders might be inclined to think that the stock might perform worse than its industry peers its also possible that the stock is undervalued there are many limitations to price to earnings ratio it is sometimes difficult to determine the nature of the earnings makeup of a company shareholders might not get what theyre looking for from trailing earnings