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

Shares trade for about 21 times estimated earnings expected over the coming 12 months, similar to the price-earnings ratio a year ago.

From Barron's • Jan. 29, 2026

With steady earnings and enhanced capital management, Telekom’s shares, trading at 2026 estimated price-earnings ratio of 13.0X and offering an expected 4.7% dividend yield in 2025, could have re-rating potential, he adds.

From The Wall Street Journal • Nov. 25, 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