Measures a company's current share price relative to its per-share earnings.
Formula: P/E = Price / EPS
How to read it: < 15 = value territory · 15–25 = fairly priced · > 25 = growth premium. High-growth sectors (tech, biotech) routinely trade at 40–60×.
Popularized by Benjamin Graham, the P/E ratio is the most widely used valuation metric. It tells investors how much they are paying for $1 of earnings.