P/E

Price paid for each dollar of trailing annual earnings.

In simple terms: How many dollars investors are paying for each $1 of the company's yearly profit.

Why should I care?

A high P/E means investors expect strong future growth. If that growth doesn't arrive, the price can fall.

Calculated from reported figures

How it's calculated

Market cap ÷ Net income (TTM)

Not meaningful when earnings are negative.

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