EPS is a commonly used measure of a company’s profitability, and it is used in the calculation of other popular valuation metrics like the price-to-earnings (P/E) ratio. To calculate earnings ...

P/E = Share Price / Earnings per Share Alternatively ... One analyst might take a high ratio (along with other relevant data) to mean that a company is overvalued, while another might interpret ...

Now, if another company in the same industry also has a share price of $50 but an EPS of $20, its P/E ratio would be 2.5, meaning it would cost $2.50 to purchase $1 of that company's earnings.

For a security, the Price/Earnings Ratio is given by dividing the Last Sale Price by the Average EPS (Earnings Per Share) Estimate for the specified fiscal time period. The PEG ratio is the Price ...