P/E Ratio (Price-to-Earnings)#

The P/E ratio compares a stock's price to its earnings per share (EPS). It is one of the most widely used indicators in fundamental analysis.

Formula: P/E = Stock Price / Earnings Per Share

A P/E of 15 means an investor pays $15 for every $1 of annual earnings. A high P/E may indicate the market expects strong future growth, or that the stock is overvalued.