Price-earnings ratio (PER) - Financial definition
Financial acronyms
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Concise definition of the term price-earnings ratio
The price-earnings ratio is the relationship between a company's stock price and its earnings per share.
Comprehensive definition of the term price-earnings ratio
The price/earnings ratio is used in fundamental analysis to express the evolution of a company's value over time or to compare the relative expensiveness of shares of different companies.
A lower P/E would indicate a relatively cheaper share compared to a similar share with a higher P/E.
Growth stocks generally tend to have higher a P/E than income stocks.