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PE Ratio is a numerical indicator of the link between a company’s stock price and its earnings per share.

PE Ratio is calculated by dividing a company’s current stock price by its EPS.

EPS measures a company’s profitability on a per-share basis and is used by investors to determine a stock or company’s worth. 


Investors and analysts use PE ratios to assess the comparative value of a company’s shares in an apples-to-apples comparison.

Investors should consider the type of company they are investing in and identify the industry in which it is situated before using PE Ratio to determine if it is worth investing in.

Ideally, an investor will want the PE Ratio to be low especially if they are following a value investment strategy.

Investors should assess the company’s peers, its history, and its growth when evaluating a company’s PE Ratio.

High PE Ratios may be acceptable to investors if they anticipate further expansions of the company in future.

Investors should compare the growth of similarly situated companies by figuring out a company’s PE Ratio as a multiple of its projected earnings growth rate.

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All you need to know about PE Ratio

PE Ratio is a financial metric used to compare the relative value of a company's stock price to its earnings per share. It helps investors assess a company's performance compared to its peers, its past performance, and broad market trends over time.

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All you need to know about PE Ratio

PE Ratio is a financial metric used to compare the relative value of a company's stock price to its earnings per share. It helps investors assess a company's performance compared to its peers, its past performance, and broad market trends over time.

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