Update: dictionary.com says twice a year... it continues with the definition with every two years: Biennial. In Britain, it seems, it might mean both... but in the U.S. biannual means twice a year.
We're talking about the price-to-earnings, or P/E, ratio. The current 12-month forward P/E ratio is 16.8, FactSet's John Butters said on Friday. This P/E ratio is above the 5-year average (13.8) and the 10-year average (14.1).. But just because stocks are expensive relative to their long-term average is no guarantee that prices are doomed to fall immediately.
The Price-to-Earnings Ratio is one of the twin towers of The Fool Ratio. The P/E ratio (often simply referred to as the P/E) shows the relationship between a stock price and its company's earnings (or profits) per share of stock.Let's just get our hands dirty from the outset and calculate the P/E for Cindy's Snowshoes (NASDAQ:RAKD).he P/E ratio is such a widely used measure that the Market is obviously inclined to agree with us. Earnings are indeed at the heart of the matter of valuing a company's stock. Other measures exist, of course. You might wish to value a real-estate company's stock not off its earnings but off the value of its land.