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 ?
With an average price to earnings ratio (P/E) of 4, this sector was below the overall market average and was amongst the cheapest sectors of the market.
At a modest price to earnings ratio of 10, this means the Tote shops are worth pounds 2 million more to Coral than to an outside bidder.
The current house price to earnings ratio in Scotland is a sensible 3.
The teen spends hours online researching a company, knowing everything from its ticker symbol to its price to earnings ratio, his father said.
The 2010 Dental Industry Metrics Report contains information such as sales growth, earnings per share, market value, return on assets and return on equity, number of employees, price to earnings ratio, and sales multiple for each company profiled.
has a Price to Earnings Ratio of 0 with an Earnings Per Share of -0.
Blyth is seventh on the list with a house price to earnings ratio of 4.
Whitehaven in Cumbria is the most affordable seaside town based on the average house price to earnings ratio in 2009 quarter one; followed by Withernsea on the East Yorkshire coast and Maryport in Cumbria.
The bank said the house price to earnings ratio, a key affordability measure, had fallen to its lowest level for more than five-and-ahalf years.
But it said the house price to earnings ratio, a key measure of affordability, was continuing to fall.
The 2009 Dental Industry Metrics Report contains information such as sales growth, earnings per share, market value, return on assets and return on equity, number of employees, price to earnings ratio, and sales multiple for each company profiled.
3 times 2016 estimated price to earnings ratio, 37 percent discount to NAV (net asset value).