What is a good P/E ratio?

There is no universal "good" P/E — it depends on the sector, growth rate, and interest rate environment. Historically the S&P 500 averages 15–25×. Value investors often look below 15×; high-growth tech stocks can trade above 40× without being overvalued if earnings are growing fast.

What does a negative P/E mean?

A negative P/E occurs when a company has negative earnings (a net loss). The ratio is mathematically valid but not meaningful for valuation purposes. This tool flags negative EPS and shows the result as N/A.

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

Trailing P/E uses actual reported EPS from the past 12 months (TTM). Forward P/E uses analyst-estimated EPS for the next 12 months. Forward P/E is more predictive but depends on forecast accuracy.

How is the earnings yield calculated?

Earnings yield is the inverse of P/E: EPS ÷ Price × 100. A stock with a P/E of 20 has an earnings yield of 5%. Comparing that yield to 10-year Treasury rates helps gauge relative attractiveness.

Can I use this for ETFs or indices?

Yes. Index ETFs publish a blended EPS (weighted average of holdings). Enter the ETF price and its reported EPS to get the index P/E, useful for broad market valuation checks.

Price-to-Earnings Ratio Calculator

Enter a stock price and EPS to instantly calculate the P/E ratio and see whether the valuation leans value or growth.

Stock Inputs

Share Price ($)

Earnings Per Share — EPS ($)

Use trailing twelve-month (TTM) EPS for standard P/E, or projected EPS for forward P/E.

Typical P/E Ranges

Below 10× Deep value / distressed

10× – 15× Value territory

15× – 25× Historical S&P 500 average

25× – 40× Growth premium

Above 40× High-growth / speculative

Enter a share price and EPS, then click Calculate.

Copied!

Summary

The price-to-earnings (P/E) ratio divides a stock's market price by its earnings per share to show how much investors pay for each dollar of profit. A low P/E can signal undervaluation or slow growth expectations; a high P/E often reflects strong future growth baked into the price. This calculator also returns the earnings yield — the inverse ratio useful for comparing stocks against fixed-income alternatives.

How it works

Enter the current market price per share.
Enter the earnings per share (EPS) — use trailing twelve months for a standard P/E.
The calculator divides price by EPS to produce the P/E ratio.
Review the classification: low P/E suggests value, high P/E suggests growth expectations.
Use the earnings yield (inverse of P/E) to compare against bond rates.

Use cases

Quickly assess whether a stock looks cheap or expensive relative to its earnings.
Compare P/E ratios across multiple stocks in the same sector.
Cross-check analyst-reported P/E figures for accuracy.
Calculate forward P/E by entering the projected EPS instead of reported EPS.
Teach students the relationship between price, earnings, and market expectations.
Screen stocks by entering target P/E thresholds to back into a fair price.

Frequently Asked Questions

Last updated: 2026-06-11 · Reviewed by Nham Vu