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Share price divided by earnings per share.
The price-to-earnings (P/E) ratio is a stock's price divided by its earnings per share over a year. It tells you how many dollars investors pay for each dollar of yearly profit.
A stock at $100 with $5 of earnings per share has a P/E of 20: you pay 20 years of today's profits.
A high P/E means investors expect strong growth; a low one can mean a bargain or a problem. It's most useful when compared with the company's history and its peers.
Try it: Stock Fair Value Calculator