According to the website maintained by iShares for the Russell 2000 index its current P/E is 13.28, which is well below average—suggesting that this segment of the stock market is significantly undervalued.
According to The Wall Street Journal’s website, in contrast, the Russell 2000’s RUT, 0.26% current P/E ratio is 63.91—nearly five times the iShares’ level and well above average.
This huge difference traces primarily to how unprofitable companies’ losses are incorporated into the P/E’s calculation. The iShares P/E ignores them, while The Wall Street Journal’s data source does not. (For the record, iShares does not hide that it ignores unprofitable companies. Nevertheless, unsuspecting investors can easily overlook the footnote explaining the omission of losses.)
Mark Hulbert MarketWatch 17 January 2023