P/E Ratio Calculator
Calculate the price-to-earnings (P/E) ratio from share price and earnings per share, with the earnings yield it implies.
How it works
P/E ratio = share price ÷ earnings per share · Earnings yield = EPS ÷ price × 100
The price-to-earnings ratio tells you how many dollars investors are paying for each dollar of a company’s annual earnings — a quick gauge of how richly a stock is valued. A high P/E signals the market expects strong future growth (or that the stock is expensive); a low P/E can mean a bargain or a business in trouble. The earnings yield is simply the P/E flipped over, letting you compare a stock’s earnings return against bond yields.
Worked example
A stock at $150 with earnings per share of $6 has a P/E of 150 ÷ 6 = 25×. Flipping it, the earnings yield is 6 ÷ 150 = 4.00% — the annual earnings you get for the price paid.
Frequently asked questions
What is a “good” P/E ratio?
There is no universal answer — it depends on the industry and growth rate. Fast-growing tech firms often trade at 30×+ while mature utilities sit near 10×–15×. Compare a stock’s P/E against its peers and its own history.
Why is my P/E showing N/A?
A P/E needs positive earnings. If EPS is zero or negative, the ratio is meaningless, so it reads N/A. Analysts then turn to forward P/E, price-to-sales or other measures.
What is the difference between trailing and forward P/E?
Trailing P/E uses the last 12 months of actual earnings; forward P/E uses analysts’ estimates for the next 12 months. Forward P/E reflects expected growth but relies on forecasts that can miss.
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Educational estimate, not investment advice. Ratios and valuation models are simplifications; verify figures against official filings and consult a licensed advisor before investing.