The price-to-earnings ratio, or P/E ratio for short, is a method of determining the worth of a company. Divide the company's market value per share by its earnings per share to get the P/E ratio (EPS).

A high P/E ratio indicates that investors anticipate high earnings and strong growth in the future. A low P/E ratio could indicate that the company is undervalued or that current earnings are outperforming historical trends.