Price-Earnings Ratio (P/E)
The PE ratio is determined by dividing a stock's price by its most recent 12-months' earnings per share.
Fundamental value investors seek out companies with low price-earnings ratios in the belief that the market has mispriced the price of the stock relative to the future earnings potential of the company.
Since P/E ratio is a function of both price and earnings, a low p/e stock can suddenly have a high p/e when the company's earnings decrease