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Related to multiple: multiple sclerosis, multiple myeloma, least common multiple

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


1. In stock-index futures, the number multiplied by the futures price to determine the value of the contract. For example, the $500 multiple of the Standard & Poor's Midcap Index is multiplied by the futures price to determine the value of one contract. Thus, a futures price of $230 would yield a contract value of $115,000 ($500 × $230).


A stock's multiple is its price-to-earnings ratio (P/E). It's figured by dividing the market price of the stock by the company's earnings.

The earnings could be the actual earnings for the past four quarters, called a trailing P/E. Or they might be the actual figures for the past two quarters plus an analyst's projection for the next two, called a forward P/E.

Investors use the multiple as a way to assess whether the price they are paying for the stock is justified by its earnings potential. The higher the multiple they are willing to accept, the higher their expectations for the stock.

However, some investors reject stocks with higher multiples, since it may be impossible for the stock to meet the market's expectations.

References in periodicals archive ?
Several new developments are expected to take place in field of multiple myeloma segments in coming years.
To ensure continuous data access when a disk drive fails, multiple initiators have long been used in enterprise computing to provide disk drive access to multiple hosts and host bus adapters or both--an approach that requires the installed devices support the SCSI command set to have the capability to support I/O requests from more than one controller at a time.
And parents of multiples need to be especially aware - they're already putting up with even more sleep deprivation, stress of crying and physical demands - especially if breast-feeding.
Howard DE and Wang MQ, Multiple sexual-partner behavior among sexually active US adolescent girls, American Journal of Health Behavior, 2004, 28(1):3-12.
Multiple myeloma is characterized by a proliferation of plasma cells that produce M proteins and an overproduction of myeloma protein and immunoglobulin.
Conduction aphasia in multiple sclerosis: A case report with MRI findings.
Anti-trust litigation proliferated after 1969 when the United States Justice Department focused on the real estate brokerage industry and multiple listing services in particular, in order to confirm that suggested or recommended or required commission rates and commission splits were no longer being promoted by boards of realtors, real estate boards and their multiple listing services.
The worker with multiple chemical sensitivities: an overview.
The ITFA will enable the Internet to continue to grow without the threat of multiple and discriminatory sales taxes.
In both multiple sclerosis and EAE, the immune system seems to attack the myelin sheath that insulates the nerves of the brain and spinal cord.
For each of the above configurations, dryers can have either the traditional twin-tower design with dual desiccant beds or the newer option of multiple desiccant beds.
Typically, you can estimate the value of a firm or corporate division's capital by using various earning multiples observed for similar public companies.

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