 Looking into the current session, Ligand Pharmaceuticals Inc. NASDAQ: LGND is trading at 114.70, after a 3.34 decrease. Over the past month, the stock fell by 3.95, but over the past year, it actually spiked by 22.54. With questionable short-term performance like this, and great long-term performance, long-term shareholders might want to start looking into the companys price-to-earnings ratio.Assuming that all other factors are held constant, this could present itself as an opportunity for shareholders trying to capitalize on the higher share price. The stock is currently under from its 52 week high by 10.25.The PE ratio measures the current share price to the companys earnings per share. It is used by long-term investors to analyze the companys current performance against its past earnings, historical data and aggregate market data for the industry or the indices, such as SP 500. A higher PE indicates that investors expect the company to perform better in the future, and the stock is probably overvalued, but not necessarily. It also shows that investors are willing to pay a higher share price currently, because they expect the company to perform better in the upcoming quarters. This leads investors to also remain optimistic about rising dividends in the future.View more earnings on LGNDDepending on the particular phase of a business cycle, some industries will perform better than others.Ligand Pharmaceuticals Inc. has a better PE ratio of 312.26 than the aggregate PE ratio of 0.01 of the Biotechnology industry. Ideally, one might believe that Ligand Pharmaceuticals Inc. might perform better in the future than its industry group, but its probable that the stock is overvalued.Price to earnings ratio is not always a great indicator of the companys performance. Depending on the earnings makeup of a company, investors may not be able to attain key insights from trailing earnings.See more from Benzinga Earnings Scheduled For August 3, 2020 Stocks That Hit 52-Week Highs On TuesdayC 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. 