Short answer
Price-to-Earnings: the stock price divided by yearly profit per share. A P/E of 20 means investors pay $20 for every $1 the company earns.
Price-to-Earnings: the stock price divided by yearly profit per share. A P/E of 20 means investors pay $20 for every $1 the company earns.
It's a quick check of whether a stock looks cheap or expensive vs its earnings.
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