Industry Pe Ratios

Industry P/E Ratios

Retrieve price-to-earnings ratios by specific industry and exchange using the Octagon MCP server.

Prerequisites

Ensure Octagon MCP is configured in your AI agent (Cursor, Claude Desktop, Windsurf, etc.). See [references/mcp-setup.md](references/mcp-setup.md) for installation instructions.

Workflow

1. Identify Parameters

Determine your query parameters:

• Date: Specific date for the data
• Exchange: NYSE, NASDAQ, etc.
• Industry: Semiconductors, Software, Biotechnology, etc.

2. Execute Query via Octagon MCP

Use the octagon-agent tool with a natural language prompt:

Retrieve the latest industry P/E ratios for , filtered by exchange  and industry .

MCP Call Format:

{
  "server": "octagon-mcp",
  "toolName": "octagon-agent",
  "arguments": {
    "prompt": "Retrieve the latest industry P/E ratios for 2025-02-03, filtered by exchange NYSE and industry Semiconductors."
  }
}

3. Expected Output

The agent returns industry P/E data:

| Metric | Value | |--------|-------| | Industry | Semiconductors | | Exchange | NYSE | | P/E Ratio | 12.47 | | Date | 2025-02-03 | | Example Company | ON Semiconductor (ON) |

Data Sources: octagon-companies-agent, octagon-financials-agent, octagon-sec-agent, octagon-web-search-agent

4. Interpret Results

See [references/interpreting-results.md](references/interpreting-results.md) for guidance on:

• Comparing company P/E to industry P/E
• Industry vs. sector differences
• Cross-industry analysis
• Peer group valuation

Example Queries

Specific Industry and Exchange:

Retrieve the latest industry P/E ratios for 2025-02-03, filtered by exchange NYSE and industry Semiconductors.

NASDAQ Industry:

Get P/E ratios for the Software industry on NASDAQ.

Industry Comparison:

Compare P/E ratios for Semiconductors, Software, and Internet industries.

Historical Trend:

What is the historical P/E trend for the Biotechnology industry?

Peer Analysis:

What are the P/E ratios for companies in the Electric Vehicles industry?

Industry vs. Sector

Hierarchy

Sector (Broad) → Industry (Specific) → Sub-Industry (Niche)

Example

| Level | Example | |-------|---------| | Sector | Technology | | Industry | Semiconductors | | Sub-Industry | Memory Chips |

Why Industry Matters

| Comparison | Purpose | |------------|---------| | Sector P/E | Broad market context | | Industry P/E | Peer group benchmark | | Company P/E | Specific valuation |

Common Industries

Technology Sector Industries

| Industry | Typical P/E Range | |----------|-------------------| | Semiconductors | 15-35 | | Software | 25-50 | | IT Services | 18-30 | | Hardware | 15-25 | | Internet | 30-60 |

Healthcare Sector Industries

| Industry | Typical P/E Range | |----------|-------------------| | Biotechnology | 20-40 (or N/A) | | Pharmaceuticals | 15-25 | | Medical Devices | 25-40 | | Healthcare Services | 18-28 | | Health Insurance | 12-20 |

Financial Sector Industries

| Industry | Typical P/E Range | |----------|-------------------| | Banks | 10-15 | | Insurance | 10-18 | | Asset Management | 12-20 | | REITs | 15-25 | | Fintech | 25-50 |

Consumer Sector Industries

| Industry | Typical P/E Range | |----------|-------------------| | Retail | 15-25 | | Restaurants | 20-35 | | Apparel | 15-25 | | Automotive | 8-15 | | E-commerce | 30-60 |

Industrial Sector Industries

| Industry | Typical P/E Range | |----------|-------------------| | Aerospace & Defense | 18-25 | | Machinery | 15-22 | | Transportation | 12-20 | | Construction | 12-18 | | Electrical Equipment | 18-28 |

Using Industry P/E for Analysis

Company Valuation Context

| Comparison | Interpretation | |------------|----------------| | Company P/E Industry P/E | Premium for quality/growth |

Premium/Discount Calculation

Premium/Discount = (Company P/E - Industry P/E) / Industry P/E × 100%

Example

• Company P/E: 18
• Industry P/E (Semiconductors): 12.47
• Premium: (18 - 12.47) / 12.47 = +44.3% (trading at premium)

Peer Group Analysis

Defining Peer Groups

| Approach | Method | |----------|--------| | Same Industry | Direct competitors | | Similar Size | Market cap range | | Similar Growth | Growth rate bands | | Similar Model | Business model match |

Peer Comparison Framework

| Metric | Compare | |--------|---------| | P/E vs. Industry | Relative value | | Growth vs. Industry | Growth premium | | Margins vs. Industry | Quality premium | | Size vs. Industry | Scale premium |

Industry Characteristics

High P/E Industries

| Industry | Why Higher P/E | |----------|----------------| | Software | Recurring revenue, scalability | | Biotech | Pipeline optionality | | E-commerce | Growth potential | | Cloud | Secular growth trend |

Low P/E Industries

| Industry | Why Lower P/E | |----------|----------------| | Banks | Cyclical, regulated | | Insurance | Mature, capital-intensive | | Utilities | Slow growth, stable | | Commodities | Cyclical, price-takers |

Exchange Considerations

NYSE vs. NASDAQ

| Exchange | Industry Mix | |----------|--------------| | NYSE | More diversified, traditional | | NASDAQ | Tech-heavy, growth-oriented |

Same Industry, Different Exchange

| Consideration | Impact | |---------------|--------| | Different companies | Different P/E averages | | Liquidity differences | Valuation premiums | | Listing requirements | Company quality |

Common Use Cases

Stock Valuation

Is AMD's P/E reasonable compared to the Semiconductor industry?

Industry Selection

Which industries have the most attractive valuations?

Peer Benchmarking

How does NVDA's valuation compare to semiconductor peers?

M&A Analysis

What P/E is typical for Software industry acquisitions?

Analysis Tips

1. Use industry, not just sector: More precise comparison.

1. Consider growth rates: Higher growth justifies higher P/E.

1. Check profitability mix: Loss-making companies distort averages.

1. Compare apples to apples: Same business model.

1. Adjust for size: Large-caps often command premiums.

1. Look at sub-industries: Even more precise comparisons.

Integration with Other Skills

| Skill | Combined Use | |-------|--------------| | sector-pe-ratios | Industry vs. sector context | | financial-metrics-analysis | Company P/E details | | income-statement | Earnings driving P/E | | stock-performance | Price trends within industry |

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: OctagonAI
• Source: OctagonAI/skills
• License: MIT
• Homepage: https://octagonai.co

Install and usage instructions live in the source repository linked above.