Eddy Elfenbein submits: Last week, Cintas (NASDAQ:CTAS), the uniform maker, missed its earnings by a penny a share. So the stock is down about 300 pennies. Now we have to ask, should an earnings miss have a p/e ratio of 300? Time will tell.
Shares of CTAS were incredibly popular during the 90s. The stock went up and up and up some more. By the end of the decade, the stock was going for 60 times earnings. Talk about a good company and a lousy stock. This decade, shares of CTAS haven't done much but the earnings keep climbing.
Check out this chart. Rising earnings, falling multiples and a flat stock: