What is PE

PE, or Price-to-Earnings ratio, is a financial metric used to evaluate a company's stock price relative to its earnings. It is calculated by dividing the current market price of a company's stock by its earnings per share. This ratio provides investors with a measure of how much they are paying for each dollar of a company's earnings. A higher PE ratio indicates that investors are willing to pay more for a company's earnings, which may indicate that the stock is overvalued. Conversely, a lower PE ratio may suggest that the stock is undervalued. PE ratios are commonly used by investors to assess the relative value of a company's stock and to make investment decisions. However, it should be noted that PE ratios should be used in conjunction with other financial metrics and analysis to make informed investment decisions.