P/E Ratio Calculator (Price to Earnings)
By Santaji GadepatilinUpdated October 27, 2026
The price-to-earnings ratio compares a company's share price with its earnings per share. It shows how much investors pay for each rupee or dollar of profit. This free P/E ratio calculator solves for whichever value you leave blank and shows the formula and steps.
How to use the P/E ratio calculator
Enter the share price, the earnings per share for the last twelve months (trailing EPS) and, optionally, the expected EPS growth rate. The calculator gives the P/E ratio, earnings yield and PEG ratio. To find the price at a target P/E, press × on Share price.
P/E ratio formulas
P/E = Price ÷ EPS · Earnings yield = EPS ÷ Price · PEG = P/E ÷ growth (%)
Example
Price 1,500, EPS 60, growth 15%:
- P/E = 1,500 ÷ 60 = 25× — investors pay 25 for each 1 of yearly earnings
- Earnings yield = 4%
- PEG = 25 ÷ 15 = 1.67
What P/E tells you
| P/E | Often suggests |
|---|---|
| Under 10 | Low growth, cyclical business, or the market sees risk |
| 10–20 | Mature, steady companies |
| 20–40 | Strong growth expected |
| Above 40 | Very high growth expectations or temporarily low earnings |
Trailing vs forward P/E
- Trailing P/E uses the last 12 months of actual earnings.
- Forward P/E uses analysts’ estimates for the next 12 months.
Forward P/E is lower for growing companies but relies on forecasts that may be wrong.
Earnings yield vs bond yields
Earnings yield (the inverse of P/E) lets you compare stocks with bonds and deposits. A P/E of 25 means a 4% earnings yield — though earnings can grow, unlike a fixed coupon.
Limits
P/E ignores debt, cash, cyclicality and one-off gains or losses. Compare it with other measures such as price-to-book, EV/EBITDA and dividend yield.
Frequently asked questions
What is a good P/E ratio?
There is no single good number. Compare with the company’s history, its industry and the market. Fast-growing companies usually trade at higher P/Es.
How is EPS calculated?
EPS = net profit attributable to shareholders ÷ number of shares outstanding.
What is the PEG ratio?
P/E divided by the expected earnings growth rate (in %). A PEG near 1 is often seen as fair value; below 1 may suggest the stock is cheap relative to its growth.
What is a negative P/E?
When a company has losses, EPS is negative and P/E is not meaningful. Analysts usually show it as “n/a”.