Series 79: Price/Earnings Ratio

Taken from our Series 79 Top-off Online Guide

Price/Earnings Ratio

EPS forms the denominator in the all-important price/earnings ratio, or P/E ratio, which is a critical driver of stock price.

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For example, a stock with EPS of $1 and a share price of $15 has a P/E ratio of 15.

Stocks with low P/E ratios are thought of as

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