P/E Ratio Calculator
Compute a company's price-to-earnings ratio, earnings yield and PEG ratio.
About the P/E Ratio Calculator
Enter the share price and the earnings per share for the last 12 months, and optionally the expected yearly earnings growth. The calculator gives the P/E ratio, the earnings yield and, with growth, the PEG ratio.
P/E compares the share price with a year's earnings per share. A high P/E means investors expect growth or pay a premium for quality; compare with peers in the same industry. The PEG ratio divides P/E by the expected growth rate.
The formula
P/E = price ÷ EPS; earnings yield = EPS ÷ price; PEG = P/E ÷ growth %
Worked example
A share at 150 with earnings of 6 a share, growing 12% a year
- P/E = 150 ÷ 6 = 25
- Earnings yield: 6 ÷ 150 = 4%
- PEG = 25 ÷ 12 = 2.08
Things to keep in mind
- Meaningless when earnings are zero or negative.
- One-off gains or losses distort EPS; adjusted figures are often used.
Questions people ask
Trailing or forward P/E?
Trailing uses the last 12 months' earnings; forward uses analysts' estimates.
What's a normal P/E?
The S&P 500 has averaged roughly 15–20 over the long run, but it varies widely by sector and era.
What PEG is cheap?
Around 1 or below is often taken as reasonable value for the growth; it depends on how reliable the growth forecast is.