{"id":27637,"date":"2026-04-16T06:07:21","date_gmt":"2026-04-16T06:07:21","guid":{"rendered":"https:\/\/www.samco.in\/help-support\/?post_type=ht_kb&#038;p=27637"},"modified":"2026-04-16T06:07:33","modified_gmt":"2026-04-16T06:07:33","slug":"what-is-pe-ratio-and-eps-and-why-do-investors-look-at-them","status":"publish","type":"ht_kb","link":"https:\/\/www.samco.in\/help-support\/article\/what-is-pe-ratio-and-eps-and-why-do-investors-look-at-them\/","title":{"rendered":"What is PE ratio and EPS \u2014 and why do investors look at them?"},"content":{"rendered":"\n<p>PE ratio and EPS are two of the most commonly used metrics when evaluating a stock. They help you quickly assess whether a stock is expensive or fairly priced relative to its earnings.<\/p>\n\n\n\n<p><strong>EPS &#8211; Earnings Per Share<\/strong><\/p>\n\n\n\n<p>EPS tells you how much profit a company has earned per share.<\/p>\n\n\n\n<p>EPS = Net Profit \u00f7 Total Number of Shares Outstanding<\/p>\n\n\n\n<p>For example, if a company earns \u20b9100 crore in net profit and has 10 crore shares, its EPS is \u20b910. A higher EPS generally means the company is more profitable. Tracking EPS over multiple years tells you whether earnings are growing.<\/p>\n\n\n\n<p><strong>PE Ratio &#8211; Price to Earnings Ratio<\/strong><\/p>\n\n\n\n<p>The PE ratio tells you how much you are paying for every \u20b91 of the company&#8217;s earnings.<\/p>\n\n\n\n<p>PE Ratio = Current Share Price \u00f7 EPS<\/p>\n\n\n\n<p>If a stock is trading at \u20b9200 and its EPS is \u20b910, the PE ratio is 20 meaning you are paying \u20b920 for every \u20b91 of earnings.<\/p>\n\n\n\n<p><strong>How to use PE ratio<\/strong><\/p>\n\n\n\n<ul><li>A high PE could mean the stock is expensive, or that investors expect strong future growth<\/li><li>A low PE could mean the stock is undervalued, or that growth prospects are weak<\/li><li>PE ratio is most useful when compared against the company&#8217;s historical PE or against peers in the same sector<\/li><\/ul>\n\n\n\n<p>PE ratio alone does not tell you whether to buy or sell. It is one data point among many and works best alongside other research.<\/p>\n","protected":false},"author":65,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":[],"ht_kb_category":[2969],"ht_kb_tag":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb\/27637"}],"collection":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb"}],"about":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/types\/ht_kb"}],"author":[{"embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/users\/65"}],"replies":[{"embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/comments?post=27637"}],"version-history":[{"count":1,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb\/27637\/revisions"}],"predecessor-version":[{"id":27639,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb\/27637\/revisions\/27639"}],"wp:attachment":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/media?parent=27637"}],"wp:term":[{"taxonomy":"ht_kb_category","embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb_category?post=27637"},{"taxonomy":"ht_kb_tag","embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb_tag?post=27637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}