P/E Ratio Calculator
Calculate price-to-earnings ratio, earnings yield, and PEG ratio. Compare stocks by valuation or analyse forward vs trailing P/E. Works with any currency.
Try another scenario
Calculate for your country ▼
How to Use This Calculator
Tab "P/E Ratio"
Enter the current stock price and earnings per share (EPS). The calculator returns the P/E ratio, a valuation rating (value, fair, or growth/expensive), and the earnings yield. Use this to quickly gauge whether a stock looks cheap or expensive relative to its earnings.
Tab "Compare Stocks"
Enter price and EPS for 2 or 3 stocks. The calculator ranks them by P/E ratio (cheapest first) and shows the earnings yield for each. This makes it easy to compare relative valuations side by side. Set Stock C to zero if you only want to compare two.
Tab "Forward vs Trailing"
Enter the stock price, trailing EPS (last 12 months), and forward EPS (next 12 months estimated). The result compares trailing and forward P/E and explains the direction of expected earnings. Optionally enter an expected growth rate to see the PEG ratio.
The Formulas
P/E = Stock Price / Earnings Per Share (EPS)
Earnings Yield:
Earnings Yield = EPS / Stock Price × 100%
(This is the inverse of P/E — shows how much you earn per dollar invested)
PEG Ratio:
PEG = P/E Ratio / Expected Annual EPS Growth Rate (%)
PEG < 1.0 = potentially undervalued relative to growth
PEG > 2.0 = potentially overvalued relative to growth
Valuation bands (general guideline):
P/E < 15 = Value
P/E 15–25 = Fair value
P/E > 25 = Growth / Expensive
All calculations are universal. No country-specific tax rates or market data are applied. Results are estimates for educational purposes only.
Worked Examples
Example 1 — Fair-valued stock: $150, EPS $6.50
A company trades at $150 per share with annual earnings per share of $6.50.
A P/E of 23.1 falls in the fair-value range. The 4.3% earnings yield means investors earn $4.30 for every $100 invested, before dividends or buybacks.
Example 2 — Compare three stocks
Compare Stock A ($175, EPS $5), Stock B ($60, EPS $5), and Stock C ($210, EPS $7.50).
Stock B has the lowest P/E at 12.0x and the highest earnings yield at 8.3%, making it the cheapest relative to its earnings. But always check whether the low P/E reflects low growth expectations or a genuine bargain.
Example 3 — Forward vs Trailing P/E
A stock at $100 has trailing EPS of $4 (last 12 months) and forward EPS of $5 (analyst estimate for next 12 months).
Forward P/E is lower than trailing P/E, meaning analysts expect 25% earnings growth. The stock looks expensive on trailing earnings (25x) but fair on forward earnings (20x). If the growth materialises, the current price may be reasonable.
Understanding P/E Ratios
What Is the P/E Ratio?
The price-to-earnings ratio measures how much investors pay for each dollar of a company's earnings. A P/E of 20 means the market values $1 of earnings at $20. It is the most widely used stock valuation metric because it is simple, comparable, and available for virtually every public company.
Why P/E Varies by Sector
Growth sectors like technology routinely trade at P/E 30-50+ because investors price in future earnings growth. Mature sectors like utilities, banking, and energy trade at P/E 10-18 because growth is slower but dividends are higher. Always compare P/E within the same sector — a tech stock at P/E 25 may be cheap relative to peers, while a utility at P/E 25 may be overvalued.
Limitations of P/E
P/E has blind spots. It does not work for companies with negative earnings (loss-making startups). It ignores debt levels — a highly leveraged company may have a low P/E but high financial risk. One-time charges or gains can distort EPS. And P/E says nothing about future growth, which is why the PEG ratio exists as a complementary metric.
Earnings Yield vs Bond Yields
Earnings yield (inverse of P/E) lets you compare stocks to bonds. If the S&P 500 earnings yield is 5% and 10-year Treasuries yield 4.5%, the equity risk premium is only 0.5%, making stocks relatively expensive. When earnings yield is significantly higher than bond yields, stocks may offer better value.