What does PE mean in equity investment?

PE, the abbreviation of P/E ratio, is also called cost-benefit ratio, stock P/E ratio or market P/E ratio.

P/E ratio is one of the most commonly used indicators to evaluate whether the stock price level is reasonable. Divide the stock price by the annual earnings per share (the market value of a company divided by the annual profits attributable to shareholders can also get the same result).

When calculating, the stock price usually takes the latest closing price, and if EPS is calculated according to the published EPS of the previous year, it is called historical P/E ratio.

Generally, consistent estimation is used to calculate EPS estimated P/E ratio, that is, the estimated average or median value obtained by the institutions that track the company's performance after collecting the forecasts of many analysts. What is a reasonable price-earnings ratio, there is no certain standard.

Extended data:

The main processes of stock trading (floor trading) are:

(1) Open an account. Customers who want to buy and sell stocks should first open an account with a brokerage company.

(2) Through instructions, after opening an account, customers can buy and sell stocks through their brokers. Every time a stock is bought or sold, the customer gives an order to the brokerage company, and the brokerage company quickly transmits the customer's order to its broker in the exchange, and the broker executes the order.

(3) During the trading process, as soon as the brokers in the exchange receive the instructions, they will quickly go to the trading desk (trading hall) where the stocks are bought and sold to execute the instructions.

(4) Delivery: After stock trading, the buyer pays cash to obtain the stock, and the seller hands over the stock to obtain the cash. Some delivery procedures are carried out after the transaction, and some are completed through clearing companies within a certain period of time, such as a few days to dozens of days.

(5) After the transfer and delivery, the new shareholder shall go through the transfer formalities with the issuing company where he holds the shares, that is, register his name and the number of shares held in the company's register of shareholders. When this step is completed, the stock exchange is finally completed.