Many companies do not have their information or data available which could tell how the company is doing financially. These kinds of companies are unspecified and categorized in the N/A field.
Every investor needs a price-to-earnings ratio(P/E) to invest in the companies. But sometimes the companies are in the N/A field, meaning not applicable/not available/not assessed, written in that space.
What Does Having N/A as Data Means?
When a company has written N/A as its P/E ratio, it can mean two things:
- The company is new and it doesn’t have any data available to list. This usually happens to newly listed companies like initial public offering(IPO) which haven’t earned anything yet so it doesn’t have anything to show on its earnings report.
- Another reason why a company can be in the N/A field is that the P/E ratio of a company’s stock is in a negative number. Negative number ratios are possible but since they are not accepted by the financial community, they are shown as N/A. This is the most common reason why a company can be in the N/A field.
Interpreting Empty Data Fields
When an investor comes across a company with empty data written as N/A, it means the company is reporting a net loss.
When investing in these kinds of companies, investors should look for previous records of net loss. If the company hasn’t experienced severe losses in the past, it means that the company is safe to buy shares from.
Many big semiconductor, biotech, or internet sectors companies lose money often and get added in the N/A field but they also expand and grow quickly after. Amazon is an example of it.
But some companies also are in trouble if there is N/A written in their stocks. It could mean that the company is in financial trouble and you shouldn’t invest in it.
