P/E Ratio Calculator

Calculate Price-to-Earnings ratio, earnings yield, forward P/E, PEG ratio, Shiller CAPE (cyclically adjusted P/E), DDM-justified P/E, and sector-relative valuation. Identify overvalued or undervalued stocks.

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P/E Ratio
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Earnings Yield (1/PE) —
Implied Annual Return (100% payout) —
P/E Interpretation —
Extended More scenarios, charts & detailed breakdown ▾
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Forward P/E
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Trailing P/E (TTM) —
Implied EPS Growth —
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Professional Full parameters & maximum detail ▾
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P/E Variants

Trailing P/E —
CAPE (Shiller P/E — 10yr avg EPS) —

Relative Valuation

Premium/Discount to Sector —
Justified P/E (DDM-Based) —

Assessment

Valuation vs Justified P/E —

How to Use This Calculator

  1. Enter the Stock Price and EPS (trailing twelve months or forward estimate).
  2. The P/E ratio, earnings yield, and interpretation are shown instantly.
  3. Use Forward P/E tab to compare TTM vs forward multiples and implied EPS growth.
  4. Use PEG Ratio tab to assess valuation relative to growth rate.
  5. Open Professional for CAPE (Shiller P/E), sector comparison, and DDM-justified P/E.

Formula

P/E = Stock Price / EPS

PEG = P/E / Earnings Growth Rate (%)

CAPE = Price / 10-Year Average Inflation-Adjusted EPS

Example

Example: Stock price $180, EPS $9. P/E = 180/9 = 20x. Earnings yield = 9/180 = 5%. EPS growth 15%: PEG = 20/15 = 1.33 — modestly expensive relative to growth. CAPE with 10yr avg EPS $6.50: CAPE = 180/6.50 = 27.7x — elevated vs historical average.

Frequently Asked Questions

  • The P/E ratio = Stock Price / Earnings Per Share. It tells you how much investors pay per dollar of earnings. A P/E of 20x means investors pay $20 for every $1 of annual earnings. The long-run average P/E for the S&P 500 is approximately 16–18x.
  • There's no universal "good" P/E — it varies by sector, growth rate, and interest rate environment. S&P 500 historical average: ~17x. As of 2026: tech stocks often 25–40x, utilities 15–20x, financials 10–15x. Compare P/E to: the stock's historical average, sector peers, and the PEG ratio.
  • PEG = P/E / Expected Earnings Growth Rate. Peter Lynch popularized PEG as a growth-adjusted metric. PEG = 1.0 means the stock is fairly valued relative to growth. PEG < 1 suggests undervaluation; PEG > 1.5 suggests overvaluation. Best used for growth companies with consistent earnings growth.
  • CAPE (Cyclically Adjusted P/E), developed by Robert Shiller, uses 10-year inflation-adjusted average earnings to smooth out cyclical distortions. CAPE > 25 historically precedes below-average 10-year market returns. CAPE is available from Shiller's online database.
  • Justified P/E = (Dividend Payout Ratio) / (r − g), where r is required return and g is growth. This links P/E to fundamentals. A company with 40% payout, r = 9%, g = 4%: Justified P/E = 0.4 / 0.05 = 8x. If actual P/E is 15x, the stock may be overvalued vs its dividend fundamentals.

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Sources & References (5) ▾
  1. Shiller CAPE Data — Online Dataset — Robert Shiller / Yale University
  2. Damodaran — P/E Ratios by Sector — NYU Stern
  3. CFA Institute — Market-Based Valuation: Price Multiples — CFA Institute
  4. P/E Ratio Explained — Investopedia — Investopedia
  5. S&P 500 Historical P/E Ratios — multpl.com — multpl.com