Benzinga | Jan 18, 2022 09:52AM EST

Price Over Earnings Overview: Integra Lifesciences



Right now, Integra Lifesciences Inc. (NASDAQ:IART) share price is at $67.58, after a 1.75% decrease. Over the past month, the stock spiked by 1.91%, but over the past year, it actually fell by 3.16%. With questionable short-term performance like this, and great long-term performance, long-term shareholders might want to start looking into the company's price-to-earnings ratio.

The stock is currently above its 52 week low by 9.28%. Assuming that all other factors are held constant, this could present itself as an opportunity for investors trying to diversify their portfolio with Health Care Equipment & Supplies stocks, and capitalize on the lower share price observed over the year.

The P/E ratio is used by long-term shareholders to assess the company's market performance against aggregate market data, historical earnings, and the industry at large. A lower P/E can either represent a company's 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.

Integra Lifesciences Inc. has a lower P/E than the aggregate P/E of 135.04 of the Health Care Equipment & Supplies industry. Ideally, one might believe that the stock might perform worse than its peers, but it's also probable that the stock is undervalued.

There are many limitations to P/E ratio. It is sometimes difficult to determine the nature of the earnings makeup of a company. Shareholders might not get what they're looking for, from trailing earnings.