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What does the stock valuation have to do with the profit of the actual enterprise?

• loeg 5y ago
  > The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple. > P/E ratios are used by investors and analysts to determine the relative value of a company's shares in an apples-to-apples comparison. It can also be used to compare a company against its own historical record or to compare aggregate markets against one another or over time. https://www.investopedia.com/terms/p/price-earningsratio.asp https://www.investopedia.com/terms/p/price-earningsratio.asp