The price-to-earnings ratio compares what a share costs with the profit it earns. It's the quickest way to ask: how much am I paying for this?
A low P/E can mean a bargain — or that people expect profits to shrink. A high P/E can mean overexcitement — or a business everyone expects to grow fast for years.
P/E only works between similar companies. Comparing a supermarket's P/E with a chipmaker's tells you almost nothing.