price-earnings ratio

Also P/E ra·tio
Also

[prahys-ur-ningz rey-shoh, -shee-oh]

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

price-earnings ratio

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

Word History and Origins

Origin of price-earnings ratio¹

First recorded in 1960–65

Example Sentences

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.

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

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Hasbro also commands a higher price-earnings ratio of 15.2 times next year’s earnings, compared with Mattel’s 11 times estimates.

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Treasury market when the government owes $38 trillion; the corporate bond market where yields relative to government debt are the meanest in two decades; equities valued at forty times their cyclically-adjusted price-earnings ratio; or gold, “that’s just gone vertical.”

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The Magnificent Seven exchange-traded fund now has a forward price-earnings ratio of 31.3, up from 27.9 just before September’s rally.

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