DEFINITION of 'P/E 30 Ratio'
The pricetoearnings (P/E) ratio is the valuation ratio of a company's market value per share divided by a company's earnings per share (EPS). A P/E ratio of 30 means that a company's stock price is trading at 30 times the company's earnings per share.
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BREAKING DOWN 'P/E 30 Ratio'
A P/E of 30 is high by historical stock market standards. This type of valuation is usually placed on only the fastestgrowing companies by investors in the company's early stages of growth. Once a company becomes more mature, it will grow more slowly and the P/E tends to decline.
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