P/E stands for price to earnings ratio, which compares the current market price of a stock to its earnings per share (EPS). For instance, if a stock is currently trading at $50 per share and the EPS is $5 per share, the P/E is 10 (P/E = Current price of the stock divided by the EPS). P/E is also know as the earnings multiple and shows investors how high the stock price is compared to the company's earnings.