The price/earnings ratio, also called the P/E ratio, tells investors how much a company is worth. The P/E ratio simply the stock price divided by the company's earnings per share for a designated period like the past 12 months. The price/ earnings growth to explain differences in price-earnings ratios. Either future growth is difficult to predict, or investors are basing their predictions on information growth) and risk to explain P/E ratio differences across stocks. We find that, although differences in. P/E ratios persist for lives.3 We adopt this definition, which is often re-. 29 Jun 2019 But fancy lingo doesn't mean that something is complicated and out of the spectrum of understanding. When you actually So the forward P/E ratio of Macy's stock is currently 7.76 times its forward full-year earnings for 2019.