GlossaryP/E
P/E
The price-to-earnings ratio (P/E) per candle: the close divided by the earnings per share of the last twelve months at that point. Because it divides the price anew with every candle, it moves with the price and shows whether the stock has become more expensive or cheaper relative to its earnings.
How to read it
- Rising P/E with unchanged earnings: the market is paying more for the same earnings, usually on higher expectations.
- Falling P/E with a rising price: earnings are growing faster than the price.
- Compare the P/E with its own history and with companies in the same industry. A single value tells you little: growth companies carry permanently higher P/Es.
Good to know
- Only for stocks with earnings. If a company reports a loss in all reported periods, the P/E appears in the menu with “no data” and the reason.
- If the stock trades in a different currency from the one the company reports in (such as depositary receipts), the P/E converts the earnings at today's exchange rate; past exchange rate moves are left out. If it cannot be converted reliably, it appears in the menu with “no data”.
- For US companies, the values go back to about 2008, for others usually a few fiscal years.
- In replay, the P/E only uses what had been reported up to the replay time.