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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 ...
Comparing a company to other similarly sized companies in the same type of business is the best way to judge what a “good” price-to-earnings ratio is. If a stock has a lower P/E ratio than its ...
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 ...
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 ]
The S&P 500 trades at a price-to-earnings (P/E) ratio of 27.4 as of this writing, which is far more expensive than its average P/E of 18.1 going back to when the index was established in the 1950s.
And its price to earnings to growth (PEG) ratio is a modest 0.81 -- below PayPal's 0.85 and much lower than Mastercard's 1.9 or Visa's 2.3. A value near 1.0 indicates a reasonable valuation, and ...
Price is the price of the company’s stock. Earnings is the per-share earnings , represented by EPS. Divide the stock price by earnings per share and you get the stock’s P/E ratio.
A financial ratio or accounting ratio states the relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers ...