P/E Ratio

A stock price divided by its earnings per share, a core valuation metric.

The Price-to-Earnings ratio compares a company stock price to its annual earnings per share. A high P/E suggests investors expect strong future growth, or the stock is overvalued. A low P/E may indicate undervaluation or declining business. Forward P/E uses projected earnings; trailing P/E uses historical.

The stock's P/E ratio of 40 suggested investors were paying a premium for expected future growth.