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Price-to-Earnings Ratio (P/E)

The P/E ratio compares a stock's price to its earnings per share. A P/E of 20 means investors are paying $20 for every $1 of earnings. Lower P/E ratios can signal undervaluation (or low growth expectations), while higher ratios may indicate the market expects strong future growth. It's most useful when comparing companies within the same industry.

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Understanding P/E Ratio: A Beginner's Guide

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