in the current market session cornerstone building inc nysecnr is trading at 1529 after a 120 drop however over the past month the stock increased by 1044 and in the past year by 7877 shareholders might be interested in knowing whether the stock is overvalued even if the company is not 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 2253 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 2865 in the building products industry cornerstone building inc has a higher pe ratio of 499 shareholders might be inclined to think that cornerstone building inc might perform better than its industry group its also possible that the stock is overvalued there are many limitations to pe 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