right now provident finl services inc nysepfs share price is at 2442 after a 01 gain moreover over the past month the stock decreased by 096 but in the past year went up by 3039 shareholders might be interested in knowing whether the stock is overvalued even if the company is performing up to par in the current session 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 under from its 52 week high by 679 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 most often an industry will prevail in a particular phase of a business cycle than other industries provident finl services inc has a lower pe than the aggregate pe of 1222 of the thrifts  mortgage finance industry ideally one might believe that the stock might perform worse than its peers but its also probable 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