Right now, US Physical Therapy Inc. USPH share price is at $98.08, after a 0.10% decrease. Over the past month, the stock spiked by 4.08%, but over the past year, it actually fell by 31.36%. With questionable short-term performance like this, and great long-term performance, long-term shareholders might want to start looking into the company's price-to-earnings ratio.

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The stock is currently higher its 52 week low by 16.17%. Assuming that all other factors are held constant, this could present itself as an opportunity for investors trying to diversify their portfolio with Health Care Providers & Services stocks, and capitalize on the lower share price observed over the year.

The P/E ratio is used by long-term shareholders to assess the company's market performance against aggregate market data, historical earnings, and the industry at large. A lower P/E can either represent a company's poor future earnings potential or a buying opportunity relative to other stocks. It shows that shareholders are less than willing to pay a high share price, because they do not expect the company to exhibit growth, in terms of future earnings.

Depending on the particular phase of a business cycle, some industries will perform better than others.

Compared to the aggregate P/E ratio of 17.74 in the Health Care Providers & Services industry, US Physical Therapy Inc. has a higher P/E ratio of 41.43. Shareholders might be inclined to think that US Physical Therapy Inc. might perform better than its industry group. It's also possible that the stock is overvalued.

P/E ratio is not always a great indicator of the company's performance. Depending on the earnings makeup of a company, investors can become unable to attain key insights from trailing earnings.