Price-Earnings Ratio

The Price-Earnings Ratio (P/E Ratio) is a valuation metric used to assess a company's stock price in relation to its earnings per share. It indicates how much investors are willing to pay per dollar of earnings. A higher P/E ratio might suggest that a company's stock is overvalued, or investors expect higher earnings growth in the future. This ratio is widely used by investors and analysts to compare the relative value of companies' stocks within the same industry or sector.