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P/E Ratio Calculator

The P/E tells you how many dollars investors pay for each dollar of yearly earnings, and the earnings yield is the inverse. A $150 stock earning $6 has a P/E of 25 and a 4% earnings yield. Compare with the company's own history, with peers in the same industry and with the market average.

A high P/E is not bad by itself if growth justifies it, but it leaves less room for disappointment.

P/E Ratio Calculator: inputs

Calculated result
Price-to-earnings ratio25.00×
Earnings yield4.0%

P/E Ratio Calculator: Share price sensitivity

P/E Ratio Calculator: Share price and Price-to-earnings ratio5 calculations vary the “Share price” input while holding the other entered inputs constant.$12020.00×$13522.50×$15025.00×$16527.50×$18030.00×

P/E Ratio: worked example

Share price$150
Earnings per share (trailing 12 months)$6.00
Price-to-earnings ratio25.00×
Earnings yield4.0%

Common error: Calling a low P/E cheap by default. Earnings that are about to fall make a low ratio a warning, and a company earning almost nothing shows a huge one that means little.

P/E Ratio: formula

P/E = share price ÷ earnings per share; earnings yield = earnings per share ÷ share price

Investor.gov: Price-to-Earnings Ratio

P/E is distorted by one-time gains and charges, by accounting choices and by the point in the business cycle: cyclical companies look cheap at peak earnings and expensive at the trough. It ignores debt, so two companies with the same P/E can differ in risk. It should not be compared across industries with different growth and capital needs.

Share price is the current market price, and earnings per share is the trailing twelve-month figure from the company's income statement, usually reported as diluted EPS. Use GAAP earnings unless you want an adjusted number. For a forward P/E, enter analysts' estimated EPS for the coming year instead.

Negative earnings produce no meaningful ratio.

P/E Ratio: changing Share price

Share pricePrice-to-earnings ratioEarnings yield
$12020.00×5.0%
$13522.50×4.4%
$150 (example)25.00×4.0%
$16527.50×3.6%
$18030.00×3.3%

P/E Ratio: compare input ranges

InputTested fromToPrice-to-earnings ratio: low inputPrice-to-earnings ratio: high inputSwing
Share price$135$16522.50×27.50×5.00× (20%)
Earnings per share (trailing 12 months)$5.40$6.6027.78×22.73×5.05× (20%)

P/E Ratio: individual input comparisons

InputValuePrice-to-earnings ratioEarnings yield
Share price$12020.00×5.0%
$13522.50×4.4%
$15025.00×4.0%
$16527.50×3.6%
$18030.00×3.3%
Earnings per share (trailing 12 months)$4.8031.25×3.2%
$5.4027.78×3.6%
$6.0025.00×4.0%
$6.6022.73×4.4%
$7.2020.83×4.8%

P/E Ratio: combined input changes

Share price / Earnings per share (trailing 12 months)$4.80$6.00$7.20
$12025.00×20.00×16.67×
$13528.13×22.50×18.75×
$15031.25×25.00×20.83×
$16534.38×27.50×22.92×
$18037.50×30.00×25.00×

P/E Ratio: which assumptions move the result?

P/E Ratio: Price-to-earnings ratio as Share price changesPrice-to-earnings ratio starts at 20.00×. Moving Share price from $120 to $180 changes it to 30.00×, with Earnings per share (trailing 12 months) $6.00 kept fixed.$12020.00×$13522.50×$15025.00×$16527.50×$18030.00×
Chart quantityDisplayed settings
Share price$120 → $180
Price-to-earnings ratio20.00× → 30.00×
Earnings per share (trailing 12 months)$6.00
P/E Ratio: Price-to-earnings ratio as Earnings per share (trailing 12 months) changesPrice-to-earnings ratio starts at 31.25×. Moving Earnings per share (trailing 12 months) from $4.80 to $7.20 changes it to 20.83×, with Share price $150 kept fixed.$4.8031.25×$5.4027.78×$6.0025.00×$6.6022.73×$7.2020.83×
Chart quantityDisplayed settings
Earnings per share (trailing 12 months)$4.80 → $7.20
Price-to-earnings ratio31.25× → 20.83×
Share price$150

P/E Ratio: values and definitions

Quantity and definitionValue used
Share price$150
Earnings per share (trailing 12 months) — Net income divided by shares outstanding, from the company's income statement.$6.00
Price-to-earnings ratio25.00×
Earnings yield4.0%

P/E Ratio: half and double Share price

Share pricePrice-to-earnings ratio
$7512.50×
$15025.00×
$30050.00×

Investing & Returns calculators: PEG Ratio Calculator, Dividend Payout Ratio Calculator, Earnings Per Share (EPS) Calculator, Market Cap and Enterprise Value Calculator, Book Value Per Share Calculator, Graham Number Calculator.

A P/E ratio says how many dollars the market pays for one dollar of a company's yearly profit. At a $150 price and $6 of earnings, that is 25 times, or a 4 percent earnings yield if you flip it over. The flip is useful: it puts a stock's profit return on the same footing as a bond's interest rate, which makes the price feel less abstract.

Trailing-twelve-month, fiscal-year and forecast earnings produce different P/E ratios. Each gives a different P/E for the same price.

Adjust for growth with the PEG ratio calculator, and look at value with the book value per share and Graham number pages. The market cap and enterprise value calculator shows the size and debt picture. Check the dividend payout ratio to see how much earnings are returned.

Can the 4% earnings yield be treated as a cash return?

No. It is $6 earnings per share divided by the assumed $150 price. Earnings are not automatically paid as dividends or realized as an investor return.

Can a negative EPS produce a useful positive P/E?

No. A loss makes the customary positive-earnings valuation multiple unsuitable; do not take the absolute value of the loss.

What is a good P/E ratio?

A P/E comparison needs the earnings basis, reporting period, business risks and growth assumptions. Trailing and forecast earnings can produce different ratios at the same share price. A multiple alone does not establish fair value or provide a universal buy-or-sell threshold.

What is the difference between trailing and forward P/E?

Trailing P/E uses the last twelve months of actual earnings, while forward P/E uses analysts' estimates for the next year and depends on how accurate they are.

What does a negative P/E mean?

The company lost money, so the ratio is not meaningful. Investors then use revenue-based measures or focus on the path to profit.