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Glossary term
P/E ratio
In plain English
Price-to-earnings ratio: stock price divided by the company's yearly profit per share. A rough measure of how expensive a stock is.
Example
A P/E of 25 means you're paying $25 for every $1 of yearly profit.
Educational only. TrustFirst is not a registered investment adviser and does not provide personalized investment advice. This definition is written to teach the concept; it is not a recommendation to take any specific action.