If you thought the stock market was richly valued, just look at these stocks There are 10 stocks in the Standard & Poor’s 500, including industrial giant General Electric (GE), video-streamer Netflix (NFLX) and oil and gas explorer Cabot Oil & Gas (COG) that are trading for 100 times their diluted earnings the past 12 months excluding extraordinary items, according to a USA TODAY analysis of data from S&P Capital IQ. That’s even higher than the S&P 500’s 20.8 P-E. Understanding stocks’ valuations is turning out to be nearly as important as weighting profit during first-quarter earnings season. Investors are using the first-quarter as a sort of gut check to determine if the escalating prices they’re paying for stocks are worth it – given the profitability of firms. Under Armour was the latest example of a company with a lofty P-E that was cut down. Shares of the sports apparel maker fell $4.24, or 5%, to $83.52 Tuesday even though the company blew away revenue and earnings forecasts for the first quarter. Part of the problem was the company’s valuation – which was sitting at 93 times its trailing earnings. And that’s nothing compared with some other companies’ valuations. Take General Electric, the industrial giant that’s swiftly selling off banking assets so it can return to its manufacturing roots. GE sports a P-E on its trailing earnings of 227, says S&P Capital IQ. The lofty valuation isn’t due to a soaring stock’s price, though. The stock is only up 5% this year. The lofty P-E comes from the company’s depressed earnings during the first quarter. When earnings fall, that causes the P-E to rise all things held equal. GE reported a diluted loss a share of $1.13 in the first quarter, in due mostly to big changes resulting from the company’s moves out of the finance business. Shares closed Tuesday at $26.62. Chart source: S&P Capital IQ There are some stocks, though, where the P-E is hitting the stratosphere due to a soaring stock price. Video steamer Netflix is the best example. Shares of the stock are up 64% this year to close Tuesday at $560.44. That gives Netflix a trailing P-E of 146. Chart source: S&P Capital IQ Just because a stock is trading for a rich premium relative to past earnings doesn’t mean it’s a bad stock. This is the core of the debate that’s raging during this earnings season. Analysts who follow these stocks the most closely actually see upside to all but two of them – Netflix and biotech Regeneron Pharmaceuticals (REGN). Back to GE. Forget the inflated P-E for now. Analysts are calling for the company to earn an adjusted profit per share of $1.51 over the next 12 months. The company’s P-E based on this forward expected earnings is 18 based on Tuesday’s closing price of $26.62 a share. Analysts rate the stock an “outperform” and think the stock could be worth $30.19 a share in 18 months. Here’s another big caveat: if some of these companies deliver massive earnings gains in the first and second quarters – they could quickly grow into their valuations and suddenly look much less expensive. Now you have something else to pay attention to during earnings season – other than just the bottom line: Valuation. S&P 500 WITH HIGHEST P-E RATIOSCompanySymbolTrailing P-EUpside to analysts’ target4/21 closeGeneral ElectricGE227.313.4%$26.62AutodeskADSK17615.7%$61.61Tenet HealthcareTHC149.619%$50.85NetflixNFLX146.1-0.7%$560.44Regeneron PharmaceuticalsREGN150.9-2.6%$463.22Cabot Oil & GasCOG131.06.7%$32.76Allegheny Tech.ATI144.417.5%$34.65Adobe SystemsADBE122.313.7%$74.62NRG EnergyNRG110.725.3%$25.47Essex PropertyESS109.34.5%$225.15 Sources: S&P Capital IQ, USA TODAY