IN PLAIN ENGLISH
How expensive the stock is compared to how much money it makes. It tells you how many years it would take to earn back your investment through profits alone.
FULL DEFINITION
The ratio for valuing a company that measures its current share price relative to its per-share earnings.
EXAMPLE
P/E of 20 means you are paying £20 for every £1 of profit the company makes.
Educational content only. It is not personal financial advice.