P/E ratio calculator

P/E ratio calculator: what it is for

Enter the share price and earnings per share (or net income and number of shares) to calculate the P/E ratio, the earnings yield, how many years earnings take to pay back the price, the PEG with expected growth and the fair price for the P/E you consider appropriate. A scale shows whether the multiple is in the cheap, moderate, expensive or very expensive range (a general reference that varies by sector). Educational tool: results are estimates, not investment advice.

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How to use

1. Enter the share price.
2. Enter EPS or net income and shares.
3. See the P/E, PEG and fair price.

When to use it

• Compare stocks in the same sector.
• See whether a stock is expensive or cheap.
• Compare stocks with bonds through earnings yield.

Frequently asked questions

What is the P/E ratio?

It is the share price divided by earnings per share (EPS) over the last 12 months. A P/E of 10 means the market pays $10 for every $1 of annual earnings, or that, with stable earnings, it would take 10 years for the earnings to pay back the price.

Is a low P/E always good?

Not necessarily. It may mean a cheap stock, but also falling earnings, a sector in crisis or earnings inflated by a one-off event. Compare with the company's own history and with peers in the same sector.

What is earnings yield?

It is the inverse of P/E (earnings ÷ price), in %. A P/E of 10 equals an earnings yield of 10% a year, which makes it easy to compare a stock with bonds.

What is PEG?

It is the P/E divided by the expected annual earnings growth (in %). A PEG near 1 suggests the price is consistent with growth; below 1, it may be cheap for the growth it delivers.

Is it really free?

Yes, 100% free. No sign-up, no subscription and no usage limits. All Tools123 are free.

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