The Kraft Heinz Company ( NASDAQ:KHC ) is currently trading at a trailing P/E of 25.8x, which is lower than the industry average of 25.9x.

While KHC might seem like an attractive stock to buy, it is important to understand the assumptions behind the P/E ratio before you make any investment decisions.

Ideally, we want to compare the stock’s P/E ratio to the average of companies that have similar characteristics as KHC, such as size and country of operation.

You may have already conducted fundamental analysis on the stock as a shareholder, so its current undervaluation could signal a good buying opportunity to increase your exposure to KHC.

Looking at PE on its own will not give you the full picture of the stock as an investment, so I suggest you should also look at other relative valuation metrics like EV/EBITDA or PEG.