price-earnings ratio

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Price-earnings ratio

Shows the multiple of earnings at which a stock sells. Determined by dividing current stock price by current earnings per share (adjusted for stock splits). Earnings per share for the P/E ratio are determined by dividing earnings for past 12 months by the number of common shares outstanding. Higher multiple means investors have higher expectations for future growth, and have bid up the stock's price.

Price-Earnings Ratio

The price of a security per share at a given time divided by its annual earnings per share. Often, the earnings used are trailing 12 month earnings, but some analysts use other forms. The P/E ratio is a way to help determine a security's stock valuation, that is, the fair value of a stock in a perfect market. It is also a measure of expected, but not realized, growth. Companies expected to announce higher earnings usually have a higher P/E ratio, while companies expected to announce lower earnings usually have a lower P/E ratio. See also: PEG

price-earnings ratio (P/E ratio)

A common stock analysis statistic in which the current price of a stock is divided by the current (or sometimes the projected) earnings per share of the issuing firm. As a rule, a relatively high price-earnings ratio is an indication that investors believe the firm's earnings are likely to grow. Price-earnings ratios vary significantly among companies, among industries, and over time. One of the important influences on this ratio is long-term interest rates. In general, relatively high rates result in low price-earnings ratios; low interest rates result in high price-earnings ratios. Also called earnings multiple, market multiple, multiple, P/E ratio. See also forward P/E, trailing P/E.

price-earnings ratio

a ratio used to appraise a quoted public company's profit performance, which expresses the market PRICE of the company's SHARES as a multiple of its PROFIT. For example, if a company's profit amounted to £1 per share and the price of its shares was £10 each on the STOCK MARKET; then its price-earnings ratio would be 10:1. Where a company's prospects are considered by the stock market to be good, then it is likely that the company's share price will rise, producing a higher price-earnings ratio. Price-earnings ratio is the mirror image of EARNINGS YIELD. See EARNINGS PER SHARE.

price-earnings ratio

a ratio used to appraise a quoted public company's profit performance that expresses the market PRICE of the company's SHARES as a multiple of its PROFIT. For example, if a company's profit amounted to £1 per share and the price of its shares was £10 each on the STOCK EXCHANGE, then its price-earnings ratio would be 10:1. Where a company's prospects are considered by the stock exchange to be good, then it is likely that the company's share price will rise, producing a higher price-earnings ratio. The price-earnings ratio is the mirror image of EARNINGS YIELD. See EARNINGS PER SHARE.
References in periodicals archive ?
Since the PE is not constant with a clear favorable/unfavorable reading like blood pressure, is the S and P price earnings ratio headed to 116 or to 5.9?
'Valuations attractive with the stock trading at (20 times FY-2017 Price earnings ratio, a discount to the 22 times multiple of its regional peers).'
He also states that given how price earnings ratios are indicative of earnings growth, they are thereby correlated to expected investor returns (as measured through ROE).
Market conditions are unlikely to improve in the near term, hence the shares trading on a price earnings ratio of six times, but they are worth tucking away.
MANAMA: With National Bank of Bahrain shares currently trading at a price earnings ratio of 12 to 14 they remain an attractive investment proposition, according to a paper by TAIB Research.
It has one of the lowest valuations in the sector, trading on a price earnings ratio of 15.4 times against the UK sector average of 16 times.
That rate of growth is faster than that forecast for the rest of the banks, yet the stock trades on a lower price earnings ratio than the sector average.
This industry's projected price earnings ratio would be in the high teens instead of below 10." All that from practicing lean manufacturing.
Earnings continue to be strong and growing with the stock now trading at a price earnings ratio (P/E) of under five.
The price earnings ratio has long been used as an investment analyst's tool to assess earnings growth potential and investment risks.
It can be determined using several different measurements, including the ratio of net sales to assets, the rate earned on total assets, earnings per share or common stock and the price earnings ratio.
The company expects the PSEi to rally to 7,900 to 8,200 with earnings per share growth of 11.5 percent and price earnings ratio of 18 to 19x.