Price-to-Earnings (P/E) Ratio P/E
How many dollars investors pay for each dollar of a company's annual earnings.
What it is
The P/E ratio compares a stock's share price to its earnings per share (EPS). It tells you how richly the market values a company's profits. A higher P/E means investors are paying more per dollar of current earnings, often because they expect future growth.
Why it matters
P/E is the most common quick gauge of how cheap or expensive a stock looks relative to its profits and its peers. Pitfalls: it is meaningless or negative when a company loses money, it can be distorted by one-time gains or charges, and a low P/E can signal a value trap rather than a bargain.
How it's calculated
Divide the current share price by the trailing twelve months of diluted earnings per share. It can also be computed as total market capitalization divided by total net income.
How Quintarthai uses it
P/E appears in the Summary Key-metrics grid and in the Ratios tab (multiples) on every stock's company page, and is a filterable field in the Stock Screener.