Do you consider 35+ pe ratio “value” if it is trading at its historical low?
u/Free-Initiative7508 ·
Reddit — r/ValueInvesting
· March 17, 2026 at 07:55
· ⬆ 16 pts
· 💬 75 comments
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Summary
The author is questioning whether high P/E stocks (35+) can be considered "value" investments, even if their P/E ratio is at a historical low for that specific company.
The author observes that several high-growth tech/fintech companies (HOOD, NOW, SE, MELI, RDDT, FICO) have pulled back significantly but still trade at a premium to the market and mega-cap tech.
Quality assessment: This is a general discussion and a request for educational insight, not well-researched DD. It's a conceptual question rather than a specific investment thesis.
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I’ve been tracking companies like HOOD, NOW, SE, MELI, RDDT, FICO..etc that have recently pulled back 25-40+% from their ATH. Despite the price drop, they are still trading around on average of 35+ pe ratio. From a value investing perspective, this still looks expensive especially if compared to mega-caps like meta, msft, amzn and goog which ofter trade in their mid-20s.
However, the common bull case for these stocks is that their pe is at its lowest since inception and i am kind of struggling with the justification here. How do i value these companies when their “historical low” is still trading at a significant premium over the broader market?
HOOD has pulled back 25-40+% from its All-Time High (ATH). Despite the significant price drop, its P/E ratio remains high (implied 35+), suggesting it may still be overvalued compared to the broader market and established mega-caps. The author is skeptical about the value proposition of HOOD at its current valuation, even after a large correction, and is struggling to justify an investment. The company could achieve high, sustained earnings growth, which would rapidly compress its P/E ratio and make the current price appear cheap in retrospect.
ServiceNow (NOW) has experienced a significant price correction of 25-40+% from its peak. Even after this drop, the stock maintains a high P/E ratio (35+), which raises valuation concerns for a value-oriented investor. The author is using NOW as an example of a high-quality growth company whose valuation remains a hurdle, questioning if its "historically low" P/E is a meaningful value signal. ServiceNow's strong position in enterprise workflow automation could lead to durable, high-margin growth, justifying its premium valuation and making the current price an attractive entry point for growth investors.
MercadoLibre (MELI) is cited as a company that has pulled back 25-40+% from its ATH. The stock still trades at a high P/E multiple (35+), making it appear expensive from a traditional value investing standpoint, especially when compared to profitable mega-cap tech. The author is hesitant to consider MELI a "value" play due to its high absolute P/E, despite the recent price decline and the argument that its valuation is at a historical low. MELI's dominant e-commerce and fintech position in Latin America could drive exceptional long-term growth, making the current P/E misleadingly high if earnings compound rapidly.
This Reddit post, published March 17, 2026,
features u/Free-Initiative7508
discussing HOOD, NOW, MELI.
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