The price-to-earnings (p/e) ratio is a financial metric used to evaluate a company's current share price relative to its earnings per share (EPS). It helps investors assess the relative value of a company's shares, determining whether they are overvalued or undervalued compared to its earnings. A high p/e ratio may suggest that the market expects future growth, while a low p/e ratio might indicate that the company is undervalued or facing challenges.
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