in the current market session amgen inc nasdaqamgn is trading at 20259 after a 075 gain however over the past month the stock fell by 541 and in the past year by 996 shareholders might be interested in knowing whether the stock is undervalued even if the company is performing up to par in the current session the stock is currently higher its 52 week low by 106 assuming that all other factors are held constant this could present itself as an opportunity for investors trying to diversify their portfolio with biotechnology stocks and capitalize on the lower share price observed over the year 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 amgen inc has a lower pe than the aggregate pe of 9139 of the biotechnology industry ideally one might believe that the stock might perform worse than its peers but its also probable that the stock is undervalued price to earnings ratio is not always a great indicator of the companys performance depending on the earnings makeup of a company investors can become unable to attain key insights from trailing earnings