Figuring averages can be tricky and misleading.
Say, you want to calculate the average PE of 10 companies, all with similar market caps. 9 of them are profitable. To keep it simple, let's say they all are selling for $10 per share and all have earnings of $1. So, all 9 of those have a PE of 10.
The tenth company is a big money loser as they are developing new drugs. Its stock also sells for $10/share but they lost $8/share last year.
What is the average PE of the group?
If one excludes the money loser, the average PE remains 10.
If one just considers the money loser as having 0 earnings, then the average PE is about 11.
If one counts the big losses at the last company, against the earnings of all of the profitable companies, then the average PE shoots to 100.
Personally, I think the most accurate way to do it is #1 or maybe #2.
What's that old saying...statistics lie and liars love statistics or something like that.
