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P/E Ratio Calculator

Find a stock’s P/E ratio.

How it is calculated

The price-to-earnings ratio is P/E = price per share / earnings per share. It shows how many units of currency investors pay for each unit of yearly earnings. Both values must be in the same currency, and the earnings per share (EPS) must not be zero, otherwise no result appears. The tool does not stop you from entering a negative EPS and then returns a negative ratio, which has no useful meaning for valuation. The EPS should cover a full year: use the last 12 months for a trailing P/E or an estimate for the coming year for a forward P/E, and do not mix the two when comparing companies. The ratio is rounded to two decimals.

Worked example

A stock trades at 150 and its earnings per share over the last 12 months were 6. P/E = 150 / 6 = 25.00. Investors are paying 25 units for every unit of yearly earnings, which also means it would take about 25 years of constant earnings to equal the price.

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Common mistakes

  • Using quarterly EPS instead of the yearly figure, which makes the P/E about four times too low.
  • Mixing the price in one currency with EPS in another.
  • Entering a negative EPS and reading the negative ratio as a bargain.
  • Comparing a trailing P/E with a forward P/E as if they were the same measure.
  • Judging a company as cheap or expensive from P/E alone, without comparing its sector, debt and growth.

About this calculator

This calculator divides a stock's share price by its earnings per share (EPS) to produce the P/E ratio, the most widely quoted valuation metric in stock analysis: a P/E of 20 means investors are paying $20 for every $1 of the company's annual earnings. It can use either trailing EPS (the last 12 months of actual earnings) or forward EPS (analyst-estimated future earnings), which typically give somewhat different results.

Investors comparing whether a stock looks "expensive" or "cheap" relative to its own history or to competitors in the same sector, and analysts screening for value stocks (low P/E) versus growth stocks (high P/E, reflecting expected future earnings growth) both rely on this ratio as a first-pass filter, even though it says nothing about debt or growth on its own.

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