Basics
Price-to-Earnings Ratio (P/E)
Stock price divided by earnings per share
What is Price-to-Earnings Ratio (P/E)?
Price-to-Earnings Ratio (P/E) A valuation ratio calculated as stock price divided by earnings per share. High P/E stocks are often more volatile and have higher implied volatility, reflecting greater uncertainty about future earnings justifying the premium valuation.
Complete Definition
A valuation ratio calculated as stock price divided by earnings per share. High P/E stocks are often more volatile and have higher implied volatility, reflecting greater uncertainty about future earnings justifying the premium valuation.
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