P/E Ratio Calculator

P/E (Price-to-Earnings) ratio = Stock Price ÷ Earnings Per Share. It measures how many dollars investors pay for every $1 of a company's annual earnings. For example, if a stock trades at $100 and has $5 EPS, the P/E is 20 — investors are paying $20 for every $1 of annual earnings.

Trailing P/E uses actual earnings from the past 12 months (TTM), so it's based on real, reported numbers. Forward P/E uses analyst estimates of future earnings, so it reflects market expectations but can be wrong. Fast-growing companies often have a noticeably lower forward P/E than trailing P/E, since their earnings are expected to rise.

As rough guidelines: below 10 often signals an undervalued stock (or a reason to investigate further), 10-20 is generally fairly valued, 20-35 suggests a premium or growth expectations are priced in, and above 35 is often speculative or reflects very high expected growth. Context matters enormously, though — tech companies commonly average 25-35 P/E while utilities average 12-16, so always compare within the same industry.

Not automatically. A low P/E might mean the market is pricing in real problems — a declining industry, weak fundamentals, or high debt — rather than a bargain. Always research why a stock's P/E is low before assuming it's undervalued; a P/E of 8 for a genuinely struggling company is not a discount, it's a warning.

The P/E ratio is simply Price ÷ EPS. The PEG ratio divides P/E by the company's earnings growth rate, adjusting for how fast it's growing. For example, a stock with P/E 40 but 50% earnings growth has a PEG of 0.8 (potentially cheap), while a stock with P/E 15 but only 2% growth has a PEG of 7.5 (potentially expensive) — showing how a 'cheap-looking' P/E can actually be the more expensive stock once growth is considered.