PBR (Price Book-value Ratio) shows how many times a company's book value per share (BPS) the current share price represents.
PBR (times) = Share Price ÷ BPS (Book Value Per Share)
What it measures
PBR shows how many times the share price trades relative to the net assets a company has accumulated (a rough proxy for the theoretical value that would be distributed to shareholders if the company were liquidated). A PBR of 1x means the share price equals book value per share.
How to read it
A low PBR alone does not mean a stock is undervalued — it can also reflect the market's expectation of weak future profitability.
Asset-light industries (IT, services, etc.) tend to trade at higher PBRs relative to their underlying business.
Looking at PBR together with ROE (Return on Equity) can give a more complete picture of valuation.
This article is provided for general informational purposes only and does not recommend or solicit the purchase or sale of any specific investment method or security. Final investment decisions are your own responsibility.
Frequently Asked Questions
What does a PBR below 1x mean?
In theory, it means the share price is below the company's net assets per share (a rough proxy for liquidation value). However, actual liquidation value often differs from book net assets, so a PBR below 1x does not automatically mean a stock is a "buy."
Do some industries naturally have lower or higher PBR?
Asset-heavy industries (manufacturing, utilities, etc.) tend to have lower PBRs, while asset-light industries such as IT and services tend to have higher PBRs. It is important to compare within the same industry.
