What is the P.E. ratio?
The Price to Earnings ratio is simply the price of a company’s stock divided by its Earnings Per Share. It is often used as an indicator of whether a stock is overpriced, underpriced, or on par. The PE ratio by itself is not always enough to make a good determination but it can be helpful to compare it with other companies in the same industry. The NASDAQ’s average P/E is about 35.
