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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.
Cyclically adjusted price-to-earnings ratio 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 assess ...
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.
How To Calculate P/E Ratio. You find a trailing P/E ratio by dividing a stock’s share price by the earnings per share, or EPS, which is simply the total net profits from the last year divided by ...
One of the most commonly used valuation metrics in investing is the price-to-earnings (P/E) ratio. It tells you how much you'll pay per dollar of earnings for any given stock.
When you start research stocks, and trying to decide where to put your money, you're likely to come across the term price-earnings ratio. At its most basic, the P/E is a way to value a company by ...
The most theoretically sound stock valuation method, is called "income valuation" or the discounted cash flow ( DCF) method. It is widely applied in all areas of finance. Perhaps the most common fundamental methodology is the P/E ratio (Price to Earnings Ratio).
The company's annual earnings growth rate is in the 10% to 15% range, while its forward P/E ratio is nearly 34. That means that its price/earnings-to-growth (PEG) ratio, which adjusts P/E for ...