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The price–earnings ratio, also known as P/E ratio, P/E, or PER, is the ratio of a company's share (stock) price to the company's earnings per share. The ratio is used for valuing companies and to find out whether they are overvalued or undervalued. As an example, if share A is trading at $24 and the earnings per share for the most recent 12 ...
The definition of the price-to-earnings ratio, usually called a P/E ratio, is the ratio between how much a stock costs and how much in profits that company is making.
The cyclically adjusted price-to-earnings ratio, commonly known as CAPE, [1] Shiller P/E, or P/E 10 ratio, [2] is a stock valuation measure usually applied to the US S&P 500 equity market. It is defined as price divided by the average of ten years of earnings (moving average), adjusted for inflation. [3] As such, it is principally used to ...
When you buy stock, you're essentially buying a tiny piece of the company it represents. Understanding how profitable the company is in relation to its stock price can be an important consideration...
PEG ratio. The ' PEG ratio' (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth. In general, the P/E ratio is higher for a company with a higher growth rate. Thus, using just the P/E ratio would make ...
The average price-to-earnings (P/E) ratio of the stocks in the ETF's portfolio is 16.1. By comparison, the S&P 500's P/E ratio is close to 30. ... return to the mean -- with smaller stocks ...
Earnings yield. Earning yield is the quotient of earnings per share (E), divided by the share price (P), giving E/P. [1] It is the reciprocal of the P/E ratio. The earning yield is quoted as a percentage, and therefore allows immediate comparison to prevailing long-term interest rates (e.g. the Fed model).
The P/E ratio is used as an initial way to determine the valuation of a stock, or how cheap it is. You'd expect to pay more for a company that's going to grow more in the future, while you want to ...