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What is the PE of QQQ?

Published in ETF Valuation 2 mins read

The PE ratio of QQQ is 31.56.

Understanding QQQ

The Invesco QQQ Trust (QQQ) is an exchange-traded fund (ETF) designed to mirror the performance of the Nasdaq-100 Index. This index is composed of 100 of the largest non-financial companies listed on the Nasdaq Stock Market. Consequently, QQQ offers investors exposure to a portfolio dominated by growth-oriented companies, primarily within the technology and internet sectors.

QQQ's Current Valuation: The PE Ratio

The Price-to-Earnings (PE) ratio serves as a key valuation metric, comparing a company's stock price to its earnings per share. For an ETF like QQQ, the PE ratio represents the weighted average of the PE ratios of all its underlying holdings. A higher PE ratio typically indicates that investors are willing to pay a premium for each dollar of earnings, often signaling expectations of strong future growth from the fund's constituent companies.

Here is a summary of QQQ's key valuation and market metrics:

Metric Value
PE Ratio 31.56
Price-to-Book (PB) Ratio 7.08
Dividend Yield 0.47%
Volume 29.54 Million
Assets Under Management (AUM) $294.71 Billion

A PE ratio of 31.56 for QQQ suggests that the market collectively values the earnings of its underlying companies at approximately 31.56 times their trailing twelve-month earnings. This valuation is often observed in growth-focused indices, reflecting investor optimism about future profitability and expansion.

Additional Key Metrics for QQQ

Beyond its valuation ratios, several other metrics provide a comprehensive overview of QQQ's operational characteristics:

  • Number of Holdings: QQQ diversifies its investments across 101 individual stocks.
  • Last Holding Update: The composition of QQQ's portfolio was most recently updated on November 27, 2024.
  • Portfolio Turnover: The fund exhibits a low turnover rate of 1%, indicating a stable portfolio management strategy with infrequent changes to its underlying assets.

These details offer valuable insights into the fund's investment strategy and the dynamism of its portfolio.