P/E is simply what you pay for each $1 a company earns.
▶ Watch: Price-to-Earnings (P/E) Ratio explained in 24 seconds
What it is
The P/E ratio compares a stock's share price to its earnings per share (EPS). It tells you how richly the market values a company's profits. A higher P/E means investors are paying more per dollar of current earnings, often because they expect future growth.
Why it matters
P/E is the most common quick gauge of how cheap or expensive a stock looks relative to its profits and its peers. Pitfalls: it is meaningless or negative when a company loses money, it can be distorted by one-time gains or charges, and a low P/E can signal a value trap rather than a bargain.
How it's calculated
Divide the current share price by the trailing twelve months of diluted earnings per share. It can also be computed as total market capitalization divided by total net income.
How Quintarthai uses it
P/E appears in the Summary Key-metrics grid and in the Ratios tab (multiples) on every stock's company page, and is a filterable field in the Stock Screener.
Cross-border note. EPS for a Canadian issuer is reported under IFRS via SEDAR+, while US issuers report under US GAAP via SEC EDGAR, so cross-border P/E comparisons can differ on accounting treatment even before currency.
FAQ
What is a good P/E ratio?
There is no single good number; a fair P/E depends on the company's growth, stability, and sector, so it is most useful compared against peers and the company's own history rather than in isolation.
Why is a P/E ratio sometimes blank or negative?
When a company has zero or negative earnings the ratio is undefined or not meaningful, so it is usually shown as 'n/m' rather than a misleading number.
Check your understanding
A stock trades at $60 and earned $3.00 per share over the last year. What does its P/E ratio of 20 tell you?
P/E is price divided by EPS ($60 / $3 = 20), meaning investors pay $20 for each $1 of current annual earnings; it says nothing by itself about growth, dividends, or whether the stock is over- or under-valued.