The most common measure of how expensive a stock is. The earnings multiple is equal to a stock's market capitalization divided by its after-tax earnings over a 12-month period, usually the trailing period but occasionally the current or forward period. The value is the same whether the calculation is done for the whole company or on a per-share basis. The higher the earnings multiple, the more the market is willing to pay for each dollar of annual earnings. The last year's earnings multiple would be actual, while current year and forward year earnings multiple would be estimates, but in each case, the "P" in the equation is the current price. Companies that are not currently profitable (that is, ones which have negative earnings) don't have a earnings multiple at all. also called price/earnings ratio (P/E ratio).
Related information about earnings multiple:
- Price-Earnings Ratio (P/E Ratio) Definition | Investopedia
... of the last two actual quarters and the estimates of the next two quarters. Also sometimes known as "price multiple" or "earnings multiple". Investopedia Says ...
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Definition of earnings multiple: The most common measure of how expensive a stock is. The earnings multiple is equal to a stock's market capitalization divided ...
- Price–earnings ratio - Wikipedia, the free encyclopedia
The price-to-earnings ratio, or P/E ratio, is an equity valuation measure defined as market price per share divided by annual earnings per share.
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What is Earnings Multiple? Find out right now with a helpful definition and links related to Earnings Multiple.
- Earnings Multiple - Financial Dictionary - The Free Dictionary
The price of a security per share at a given time divided by its annual earnings per share. Often, the earnings used are trailing 12 month earnings, but some ...
- earnings multiple - The Free Dictionary
price-earn·ings ratio (pr s ûr n ngz). n. The ratio of the market price of a common stock to its earnings per share. price-earnings ratio. n. (Economics, Accounting ...
- Multiple of Earnings - Multiple of Earnings Valuation
Describes how a business is valued using the multiple of earnings valuation method.
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Following on from my previous post regarding investee valuations, I want to give a brief explanation of (and make a few comments on) the earnings multiple ...