Valuation Metrics and What They Indicate
At a price-to-earnings (PE) ratio just under 20, Eighty Jewellers appears reasonably priced on the surface, especially when compared to some of its more expensive peers in the gems and jewellery sector. The price-to-book value of 1.22 indicates the stock is trading slightly above its net asset value, which is typical for companies with steady earnings but not excessively high growth expectations.
However, the enterprise value to EBITDA ratio of approximately 13.75 and EV to EBIT of 14.13 suggest the market is willing to pay a premium for the company’s operating earnings. These multiples are notably lower than some sector heavyweights like Titan Company, which trades at much higher multiples, but still indicate a valuation on the...
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