P/E Ratio Calculator
Calculate the Price-to-Earnings (P/E) ratio and earnings yield for any stock. Enter the stock price and earnings per share (EPS) to determine whether a stock may be overvalued or undervalued relative to its earnings.
P/E Ratio Calculator
FAQ
What is the P/E ratio?
The Price-to-Earnings (P/E) ratio is calculated by dividing the stock price by earnings per share (EPS). It indicates how much investors are willing to pay per dollar of earnings. A P/E of 20 means investors pay $20 for every $1 of annual earnings.
What is a good P/E ratio?
There is no universal good P/E ratio. The average market P/E is around 15-25. Growth stocks often have higher P/E ratios (30+) reflecting expected earnings growth, while value stocks tend to have lower ratios. Always compare P/E within the same industry.
What is earnings yield?
Earnings yield is the inverse of the P/E ratio, calculated as EPS / Stock Price x 100. It shows the percentage of each dollar invested that was earned by the company. It is useful for comparing stock returns to bond yields.