In the example of a company with a PE ratio of 15, it is also called “trading at a multiple of 15,” meaning that someone who buys this stock is willing to pay $15 for every dollar of earnings, or a multiple of earnings. The PE ratio may be used to see how a company compares to its peers, and whether a stock price is too expensive or trading at a discount relative to its peers. Stocks with very high PE ratios are very highly in demand, as investors have bid up the price of a stock in order to profit on expected earnings in the future.