The P/B compares the market value to the equity on the balance sheet – the „book value". Roughly: what would be left if the company sold all its assets and paid off its debts. A P/B below 1 would mean you pay less than that book value.
Rule of thumb (only partly valid):
MoatLens tip: How meaningful the P/B is depends heavily on the industry. It works well for banks, insurers, industry and real estate – there the value sits in tangible assets. For technology and brand companies it's misleading: their value lies in software, brand and customer loyalty, which barely show up on the balance sheet. On top of that, share buybacks push book value down. So for such firms a very high P/B often doesn't mean „too expensive", just: book value is the wrong yardstick here.
In MoatLens this explanation sits right next to the number — one tap away. And you see the ten-year trend instead of a single value.
