P/E Ratio

The price-to-earnings ratio, calculated by dividing a stock's current price by its earnings per share. It is the single most widely cited valuation metric in fundamental analysis. A "trailing P/E" uses the last twelve months of actual earnings, while a "forward P/E" uses analyst estimates for the next twelve months. The S&P 500's historical average P/E hovers around 15-17, though growth stocks routinely command much higher multiples.