Price to Earnings Ratio Calculator
Work out a stock's P/E ratio from its share price and earnings per share. See forward P/E, PEG ratio, and earnings yield, and get a quick read on whether the valuation looks cheap, fair, or expensive.
Inputs
A steady, established company priced close to the long-run market average P/E.
The current market price of one share.
Trailing twelve-month net income divided by shares outstanding.
Analyst or your own estimate of next year's EPS, for forward P/E.
Used to calculate the PEG ratio.
P/E ratio formulas
P/E ratio
share price ÷ earnings per share (EPS)
Earnings yield
EPS ÷ share price × 100 (the inverse of P/E)
Forward P/E
share price ÷ estimated next year's EPS
PEG ratio
P/E ratio ÷ expected annual EPS growth rate (%)
About the Price to Earnings Ratio Calculator
The price to earnings ratio (P/E ratio) is one of the most widely used measures of stock valuation. It compares a company's share price with how much profit it generates per share, giving a quick sense of how much investors are paying for each dollar of earnings.
This calculator works out the trailing P/E ratio from a share price and earnings per share (EPS), or from net income and shares outstanding if you do not already have an EPS figure. It also calculates forward P/E using an estimated future EPS, earnings yield (the inverse of P/E, useful for comparing stocks against bond yields), and the PEG ratio, which adjusts P/E for expected earnings growth.
A low P/E can mean a stock is undervalued — or it can mean the market expects earnings to decline. A high P/E can mean a stock is overpriced — or it can mean investors expect strong future growth. P/E is most useful when compared against a company's own history, its direct competitors, and its industry average, rather than read in isolation.
How to Use the Price to Earnings Ratio Calculator
- 1 Enter the current share price — the latest market price for one share of the stock.
- 2 Provide earnings per share — enter EPS directly if you know it, or switch to "Calculate from net income" and enter net income plus shares outstanding.
- 3 Add an optional forward EPS estimate to see the forward P/E ratio, useful for comparing against analyst expectations.
- 4 Add an expected annual EPS growth rate to see the PEG ratio, which weighs the P/E against the company's growth outlook.
- 5 Read your results — the P/E ratio, earnings yield, forward P/E, and PEG ratio update automatically as you type.
Frequently Asked Questions
What is a good P/E ratio? ▾
There is no single "good" P/E — it depends on the industry, growth stage, and interest rate environment. The S&P 500's long-run historical average sits around 15–25. Slower-growth sectors like utilities and banks often trade lower, while fast-growing tech companies often trade higher.
What does a negative P/E mean? ▾
A negative P/E happens when a company has negative earnings (a net loss). The ratio is not meaningful in this case, so it is usually shown as "N/A" rather than a negative number.
What is the difference between trailing and forward P/E? ▾
Trailing P/E uses actual earnings from the past twelve months. Forward P/E uses an estimate of next year's earnings. Forward P/E can be lower than trailing P/E if earnings are expected to grow, or higher if earnings are expected to shrink.
What is the PEG ratio and why does it matter? ▾
The PEG ratio divides the P/E ratio by the expected annual earnings growth rate. It helps compare companies with different growth rates on a more level footing — a high P/E can still look reasonable if growth is fast enough. A PEG around 1 is often considered fairly priced, though this varies by sector.
Is P/E ratio enough on its own to value a stock? ▾
No. P/E is a useful starting point but ignores debt, cash flow, one-off accounting items, and industry differences. It is best used alongside other measures such as price-to-book, price-to-sales, free cash flow yield, and a look at the company's balance sheet.