explain what p/e is

The P/E ratio, or price-to-earnings ratio, is a financial metric used to evaluate a company's stock. It measures the company's current share price relative to its earnings per share (EPS). Investors and analysts use the P/E ratio to determine whether a stock is valued appropriately relative to its earnings, helping them decide if a stock is overvalued or undervalued. The P/E ratio is calculated by dividing the current stock price by the earnings per share (EPS). A high P/E ratio might indicate that investors have high expectations for a company's future earnings growth, while a low P/E ratio could suggest that a stock is undervalued compared to its earnings. It's important to note that P/E ratios should be compared within the same industry or sector. Different industries may have different average P/E ratios. Also, P/E ratios can be influenced by factors such as company size, growth prospects, and risk. Therefore, it's essential to consider these factors when using P/E ratios for investment decisions.