P/E ratio
Share price divided by earnings per share: what investors pay for each dollar of annual profit.
Formula
P/E = Price ÷ Earnings per share
How to read it
Trailing P/E uses the last twelve months' earnings; forward P/E uses analysts' estimate for the next year. Meaningless when earnings are negative, and only comparable between similar businesses.
How to use it
Compare with the company's own history and with peers, never in isolation; forward P/E rests on analysts' estimates.
Limitations
Meaningless when earnings are negative or depressed by one-offs.
In Kereon
Investing · company. Kereon also places the trailing P/E against this company's own history — each month-end price over the latest annual EPS already published that month (a 90-day reporting lag), about six years of it, as a percentile — and the forward P/E against the median of every covered name in its sector and industry.
Kereon shows this figure as its data vendor publishes it and does not recompute it, so the vendor's exact inputs — which period's earnings, which balance sheet, which adjustments — are not visible here. The calculation above is the standard definition.
Also called: p/e, pe, p/e ratio, trailing p/e, forward p/e, p/e percentile of its own history, vs its own history.