P/E ratio
Price versus earnings
P/E ratio is a measure of a stock's price relative to its earnings per share.
A company trading at $100 with $5 in annual earnings per share has a P/E of 20.
High P/E suggests investors expect future growth; low P/E may indicate undervaluation or declining prospects.
Tech stocks often carry higher P/E ratios than utilities.
- price to earningsCost divided by profits
- earnings per shareProfit allocated per stock
- value investingBuying underpriced stocks fundamentally
- bull marketPeriod of rising prices
- profit marginsPercentage kept from sales
economic cycles · overvalued · market sentiment · earnings season · EBITDA · shareholder equity · industry trends · capital expenditures · competitive advantage · risk assessment · cost structure · Warren Buffett · technical analysis · stock valuation · growth stocks · product innovation · trading volume · undervalued
- financial metricsROI, ROE, EPS, NPV, IRR
- investingstocks, stock, bonds, investing, investor
- market datastock price, share price, volume, bid, ask
- stock marketstock, shares, stocks, trading, stock market
- investment metricsalpha, beta, risk, return, yield
- Financial Ratiosdebt-to-equity, ROI, ROE, gross margin, net margin
P/E ratiorevenue growth
Increase in business income
EPS · book value · net asset value · free cash flow · market capitalization
P/E ratiointrinsic value
Worth independent of circumstance
discounted cash flow · tangible assets · replacement cost · margin of safety
ratio, ratios, rational, rationale, rationality, rationalize, rationalization, irrational, irrationality