P/E Ratio (Trailing)
How many dollars investors are currently paying for each dollar of a company's trailing twelve-month earnings.
Xunlei Limited American Depositary Shares (XNET) — current share price
$5.01
What it means
The price-to-earnings (P/E) ratio, also called the trailing P/E, divides a company's current share price by its earnings per share (EPS) over the last twelve reported months. A P/E of 20 means investors are paying $20 for every $1 of the company's trailing annual earnings. It's the most widely quoted valuation ratio precisely because it reduces price and profitability to one comparable number — a $500 stock and a $5 stock can have the same P/E, and therefore arguably the same relative price, even though their share prices look nothing alike. On its own a P/E doesn't say whether a stock is cheap or expensive; it only makes sense next to something else — the company's own history, its growth rate, or other companies in the same industry.
How MarketWall calculates it
MarketWall pulls trailing P/E directly from each stock's most recent fundamentals sync (Yahoo Finance, refreshed weekly) rather than computing it in-house from raw earnings filings — the same trailing_pe figure shown on every stock page's Fundamentals card. See the Data Sources & Methodology page for the full sync schedule.
How it's typically used
A low P/E is often read as "cheap," and a high one as "expensive," but that shorthand only holds up when comparing similar companies. A mature utility with slow, predictable earnings typically trades at a structurally lower P/E than a fast-growing software company, and that gap doesn't necessarily mean the utility is the better buy — it usually just reflects how much future growth the market is pricing into each one. A very low P/E can also be a warning sign rather than a bargain: it sometimes means the market expects earnings to fall, not that the stock is undervalued (a "value trap"). A very high P/E can mean genuine optimism about future growth, or it can mean a stock has run ahead of what its current earnings support. Trailing P/E specifically looks backward — it's built entirely from earnings the company has already reported, which makes it a hard, filed number rather than a guess, but it also means it says nothing about what happens next quarter. That's the gap the Forward P/E (built from analysts' earnings estimates instead) is designed to fill — comparing the two is one of the fastest ways to see whether the market expects earnings to grow, shrink, or hold steady from here. P/E is also meaningless, or reported as negative/blank, for companies with no earnings at all (early-stage growth companies, or anything currently posting a loss) — in that case other valuation measures (price-to-sales, price-to-book) are used instead.
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FAQ
What counts as a 'good' P/E ratio?
There's no universal number — it depends on the industry and the company's growth rate. Comparing a stock's P/E to its own history and to direct competitors in the same sector is far more useful than judging it against the market as a whole.
Why is a stock's P/E sometimes blank or negative?
P/E is undefined when a company has negative or zero trailing earnings — the ratio requires a positive EPS to mean anything, so MarketWall (and most data providers) leave it blank rather than show a meaningless negative number.
What's the difference between trailing P/E and forward P/E?
Trailing P/E uses the last twelve months of already-reported earnings. Forward P/E uses analysts' estimate of the next twelve months' earnings instead — see the Forward P/E glossary entry.
How often does MarketWall update P/E ratios?
Weekly, alongside the rest of the fundamentals sync (Yahoo Finance) — see the Data Sources & Methodology page.
See more signals in the interactive walkthrough, read the full Data Sources & Methodology page, or explore it live on a real chart — AAPL or BTC.