price-earnings ratio

American  

[prahys-ur-ningz rey-shoh, -shee-oh] / ˈpraɪsˈɜr nɪŋz ˌreɪ ʃoʊ, -ʃiˌoʊ /

Also P/E ratio

noun

1. the current price of a share of common stock divided by earnings per share over a 12-month period, often used in stock evaluation. P/E, p/e, PE, P-E, p-e

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price-earnings ratio British  

noun

1.  P/E ratio.  the ratio of the price of a share on a stock exchange to the earnings per share, used as a measure of a company's future profitability

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Etymology

Origin of price-earnings ratio

First recorded in 1960–65

Example Sentences

See Examples For:

price-earnings ratio

The forward price-earnings ratio for the S&P 500 using estimates for the next 12 months is about 22 times earnings, which is above historical averages even before depreciation expenses ramp up.

From The Wall Street Journal ● Jun. 18, 2026

Still, that price-earnings ratio has fallen from about 32 times at the start of the year, according to FactSet data.

From Barron's ● Dec. 3, 2025

Another frequently used metric is the Shiller cyclically-adjusted price-earnings ratio that, at 40, also stands at a 25-year high.

From MarketWatch ● Nov. 18, 2025

Goldman Sachs said in a note a recession could cause the S&P 500 index to fall by 19% to 3,150 by the end of 2022, and a sharp contraction in the price-earnings ratio.

From Reuters ● Jul. 18, 2022

Analysts and professional investors look at something called the price-earnings ratio to gauge investors’ willingness to own stocks.

From Seattle Times ● Jun. 23, 2022