Price-to-Earnings (P/E) Ratio Calculator
Calculate a share's price-to-earnings ratio from its share price and earnings per share to gauge relative valuation.
Your results
Calculation breakdown
- P/E ratio
- share price ÷ earnings per share
- Earnings yield
- 1 ÷ P/E × 100
Worked example
A share trading at $45.00 with EPS of $3.00 has a P/E ratio of 15×, meaning the market is pricing the share at 15 times its current annual earnings.
Assumptions
- P/E is most meaningful when comparing companies within the same sector.
- Not meaningful for loss-making companies with negative or zero EPS.
- Uses trailing (historical) EPS unless you enter a forecast figure.
How this calculator works
Divide the current share price by earnings per share (EPS) to calculate the price-to-earnings (P/E) ratio, a common quick valuation metric used to compare shares within the same sector. A higher P/E can suggest the market expects stronger future growth, while a lower P/E may indicate the share is cheaper relative to current earnings.
Frequently asked questions
What counts as a 'good' P/E ratio?
It varies widely by sector and growth expectations, so P/E is most useful when comparing similar companies rather than as a standalone figure.
Where do I find EPS?
EPS is reported in a company's annual report, half-year report or on most broker and market data platforms.
What if earnings are negative?
P/E is not meaningful for a loss-making company; the calculator will flag this since a negative or zero EPS makes the ratio uninterpretable.
Results are estimates only and are not financial, tax, legal or credit advice.