The earnings multiplier is a financial metric that frames a company's current stock price in terms of the company's earnings per share (EPS) of stock, that's simply computed as price per share/earnings per share. Also known as the price-to-earnings (P/E) ratio, the earnings multiplier can be used as a simplified valuation tool with which to compare the relative costliness of the stocks of similar companies. It can likewise help investors judge current stock prices against their historical prices on an earnings-relative basis.