P/E Ratio Calculator
Evaluate stock valuation instantly. Our professional-grade calculator helps investors assess P/E ratios and PEG ratios with precision and growth context.
Interactive P/E Ratio Calculator
Calculate price-to-earnings ratio with step-by-step explanations and visual gauge. Professional tool for stock valuation and growth-adjusted PEG analysis.
P/E Ratio Formula
Price-to-Earnings (P/E) Ratio Definition
The P/E ratio is calculated by dividing the share price by the earnings per share (EPS):
Price/Earnings-to-Growth (PEG) Ratio Definition
The PEG ratio is calculated by dividing the P/E ratio by the annual earnings growth rate (in percentage):
Interpretation Guide
- P/E < 20: Low – The stock may be undervalued or have lower growth prospects
- P/E 20–25: Average – The stock is aligned with the market average
- P/E > 25: High – The stock may be overvalued or have high growth expectations
- PEG ~1: Indicates fair valuation relative to growth; <1 suggests undervaluation, >1 suggests overvaluation
- Trailing P/E: Uses historical EPS, more reliable but backward-looking
- Forward P/E: Uses projected EPS, forward-looking but speculative
How to Use the Calculator
Simple steps for accurate stock valuation analysis
Enter Share Price
Input current market price of the stock
Enter EPS
Input earnings per share (trailing or forward)
Add Growth Rate
(Optional) Enter growth rate for PEG analysis
Get Analysis
View P/E ratio with valuation assessment and charts
Frequently Asked Questions
The price-to-earnings (P/E) ratio is a financial metric that measures a company’s stock valuation by dividing its share price by its earnings per share (EPS). It shows how much investors are willing to pay per dollar of earnings.
To calculate the P/E ratio: Obtain the current share price, obtain the EPS (trailing or forward), divide the share price by the EPS. Example: P/E = $75 ÷ $3 = 25.
The PEG ratio adjusts the P/E ratio for earnings growth by dividing P/E by the annual earnings growth rate. A PEG around 1 suggests fair valuation, below 1 may indicate undervaluation, and above 1 may suggest overvaluation.
A good P/E ratio depends on the market and industry: Below 20 is low (may indicate undervaluation), 20-25 is average (market-aligned), above 25 is high (may indicate overvaluation or high growth expectations).
Trailing P/E uses EPS from the past 12 months (historical data), while forward P/E uses estimated EPS for the next 12 months (projections). Trailing is more reliable but backward-looking; forward is forward-looking but speculative.
The P/E ratio is important because it helps investors assess stock valuation, compare companies within the same industry, gauge market expectations for earnings growth, and make informed buy/sell decisions.
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