Price-to-Earnings Ratio (PE)

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What is it?

The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its trailing twelve months diluted earnings per share (EPS).

Who is interested?

The financial community and investors.

What does it tell me?

P/E ratios are used by investors and analysts to determine the relative value of a company’s shares in an apples-to-apples comparison. It can also be used to compare a company against its own historical record or to compare aggregate markets against one another or over time.