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**Price-to-Earnings Ratio (P/E Ratio)**: The P/E ratio is a valuation metric that compares a company's stock price to its earnings per share. It's calculated by dividing the current stock price by the EPS. The P/E ratio tells you how much investors are willing to pay for each dollar of a company's earnings. A high P/E ratio might suggest that a stock is overvalued, while a low P/E ratio might suggest that a stock is undervalued. However, it's essential to compare a company's P/E ratio to its industry peers and its historical performance, as a high P/E ratio might indicate growth expectations.
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