P/E
Price-to-Earnings Ratio
Example
Our P/E was down from last year but we hope to bounce back in the next four quarters
P/E definition by Slang.net
This page explains what the acronym "P/E" means. The definition, example, and related terms listed above have been written and compiled by the Slang.net team.
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Investors use a company's P/E, or Price-to-Earnings Ratio, to determine whether the company is valued correctly. A high P/E might mean a stock is overvalued, while a low P/E might mean a stock is undervalued.
P/E is calculated by dividing a company's current stock price by its EPS (earnings per share). Usually, the EPS used is an average from the last four quarters, and the calculated P/E is referred to as a trailing P/E. However, P/E can also be calculated using projected EPSes, in which case it is referred to as a forward P/E.