PE ratio

Earnings-based valuation metric

PE ratio, short for price-to-earnings ratio, is a measure of a stock's price relative to its earnings per share.

Investors use it to gauge whether a stock is overvalued or undervalued: The company trades at a PE ratio of 25.

A high PE suggests investors expect future growth; a low PE may signal undervaluation or declining prospects.

Also written P/E ratio.

valuation

multiple

Consisting of many parts

undervalued · premium · discount

earnings

EPS

Company profit per share

bottom line · guidance

market

S&P 500

Major stock market index

market cap · market sentiment · index · blue-chip · growth stock · value stock · cyclical · defensive

analysis

financial modeling

Mathematical business performance representation

peer comparison

Opposites
valuation metric type

PE ratiodividend yield

Distribution as price percentage

book value · net asset value · bond yield · market cap

Family

PE, ratio, price, earnings, prices, priced, pricing, earn, earned

Familiarity
Top 500,000
Profile
Used worldwide · Timeless · Abstract · Rated G