A definitive price-to-earnings ratio cannot universally define when a stock becomes "overvalued," because acceptable P/E thresholds vary drastically across different industries, growth stages, and macroeconomic environments. While a historical market average hovers around 15 to 20, high-growth technology companies often command much higher P/E ratios due to anticipated future earnings expansion, whereas mature utility or cyclical firms trade much lower. Investors evaluate P/E multiples relative to historical averages, peer group comparisons, and projected earnings growth rates rather than relying on a single fixed number.