 In the current session, GenMark Diagnostics Inc. NASDAQ: GNMK is trading at 12.08, after a 24.4 spike. Over the past month, the stock increased by 97.21, and in the past year, by 60.13. With performance like this, long-term shareholders optimistic but others are more likely to look into the price-to-earnings ratio to see if the stock might be overvalued.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 below from its 52 week high by 10.43.The PE ratio measures the current share price to the companys EPS. 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.Depending on the particular phase of a business cycle, some industries will perform better than others.GenMark Diagnostics has a lower PE than the aggregate PE of 17.57 of the medical devices industry. Ideally, one might believe that they might perform worse than its peers, but its also probable that the stock is undervalued.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 Stocks That Hit 52-Week Highs On Tuesday 20 Healthcare Stocks Moving In Mondays Pre-Market Session Stocks That Hit 52-Week Highs On TuesdayC 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. 