Fundamental analysis
Price-to-Earnings (P/E) Ratio, What is it?
A stock's price divided by its annual earnings per share, how much you pay for each pound of profit.
The price-to-earnings (P/E) ratio is a stock's price divided by its earnings per share (EPS). If a stock trades at 20 and earns 2 per share, its P/E is 10, you pay 10 for each pound of annual profit. A low P/E may mean the stock is relatively cheap, or that the market is pessimistic about its future; a high P/E may reflect strong growth expectations or overvaluation. The comparison is most useful within the same sector, a bank's P/E against another bank, not a tech firm. Read it alongside growth and debt, never alone.
FAQ
What is Price-to-Earnings (P/E) Ratio?
A stock's price divided by its annual earnings per share, how much you pay for each pound of profit.
How do I track Price-to-Earnings (P/E) Ratio on FoudaLens?
Screen stocks by P/E using FoudaLens's free tools, with live Egyptian-market data.