P/E & Valuation1/7
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The Price-to-Earnings Ratio
Portfolio
Tech35%
Finance20%
Healthcare20%
Energy15%
Cash10%
The P/E Ratio is the most popular valuation metric. It tells you how much investors pay for each dollar of a company's earnings.
P/E = Stock Price / Earnings Per Share (EPS)
AAPL at $185 with EPS of $6.50 P/E = 28.5×
This means investors pay $28.50 for every $1 of Apple's annual profit.
Key termsP/E ratioEPSvaluation