The price-to-earnings (P/E) ratio divides a stock's price by its earnings per share over the last twelve months. A P/E of 20 means investors pay Rs 20 (or $20) for every Rs 1 ($1) of annual profit.
Rough landmarks: under ~15 is value territory, 15–25 is the broad-market norm, above ~30 prices in serious future growth. Always compare within a sector - a utility at 12x and software at 35x can both be fairly priced.
Example
A stock at Rs 500 earning Rs 25 per share trades at 20x. If earnings double to Rs 50 and the price stays put, the P/E halves to 10x - the classic value-setup arithmetic.
In Ticker Screener
Every watchlist row shows P/E beside price, and the AI Verdict combines it with ROCE for a one-glance cheap-or-expensive call. Tap the column header to switch to Div Yld, ROCE, ROE or P/B.
Frequently asked questions
Is a low P/E always a buy?
No - it can signal a bargain or a business in decline. Check earnings trend, debt and peers first.
Why do loss-making companies show no P/E?
Negative or zero earnings make the ratio meaningless. Use price-to-sales or cash-flow multiples instead.
Related terms
ROCE
Return on capital employed: how efficiently a company turns invested money into profit. Above 15–20% signals quality.
EPS
Earnings per share: the company's yearly profit divided by share count. The 'E' inside P/E.
Market Cap
Price times shares outstanding: the market's price tag for the whole company. Defines large, mid and small caps.
P/E Ratio Explained: How to Tell If a US Stock Is Cheap or Expensive
Price-to-earnings in plain English: what it means, where it lies, sector norms, and how the extension's AI verdict uses it.
P/E, ROCE, ROE, P/B, dividend yield and market cap — live beside every price in your watchlist.