P/E 10 Ratio
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Definition of 'P/E 10 Ratio'The price-to-earnings (P/E) ratio is the valuation ratio of a company's market value per share divided by the company's earnings per share. A P/E ratio of 10 means that the company's stock price is trading at 10 times the company's earnings per share. |
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Investopedia explains 'P/E 10 Ratio'A P/E ratio of 10 is a rather conservative ratio in comparison to the stock market's historical valuations. This low P/E ratio could be a result of a slow-growing company being in a slow-growing industry, like the automobile industry. At times, however, even faster growing companies can have low P/E ratios. This may occur during a recession when investors' confidence is low regarding future prospects for the economy. |
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