Source: https://mochatrade.com/learn/glossary/p-e-ratio

# P/E ratio
URL: https://mochatrade.com/learn/glossary/p-e-ratio
Last modified: 2026-10-17

The P/E ratio is share price divided by the last twelve months of earnings per share; 25 means $25 for each dollar of annual profit. It moves on a Fed night with no earnings news because [a higher rate makes future profit worth less today](https://mochatrade.com/learn/us-market-structure/how-the-fed-moves-markets), and [the earnings in the denominator](https://mochatrade.com/learn/us-market-structure/us-earnings-explained) change four times a year.

## Related terms

- Price-to-sales ratio: https://mochatrade.com/learn/glossary/price-to-sales-ratio
- PEG ratio: https://mochatrade.com/learn/glossary/peg-ratio
- EBITDA: https://mochatrade.com/learn/glossary/ebitda
- Net interest income: https://mochatrade.com/learn/glossary/net-interest-income
- Bull and bear market: https://mochatrade.com/learn/glossary/bull-and-bear-market
- Dividend aristocrats: https://mochatrade.com/learn/glossary/dividend-aristocrats