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P/E Ratio Calculator: Price-to-Earnings, Earnings Yield and PEG
The price-to-earnings ratio shows how many years of current profits the market is paying for a share. Enter the price and earnings per share and you get the P/E, the earnings yield, and — if you add a growth estimate — the PEG. Below the calculator you'll find how to read the numbers and where the P/E misleads.
P/E calculator
Calculates in your browser, stores nothing. The result is a metric, not a valuation or a recommendation.
How the P/E ratio is calculated
P/E = share price ÷ earnings per share (EPS)
Example: a $100 share with $5 earnings per share has a P/E of 20. The earnings yield is simply the inverse: 5 ÷ 100 = 5 %.
You'll find the EPS in the company's annual report or on any finance portal. Watch which earnings figure is meant: last year's actual result (trailing) or the estimate for the current year (forward). Both produce different P/Es, and comparisons only make sense against the same kind.
What is a good P/E?
There is no universally "good" P/E. What makes sense is comparing against:
- the share's own history (is it more expensive than usual?)
- direct competitors in the same industry
- the overall market, such as the average P/E of an index
Growth industries often carry high P/Es; cyclical industries like chemicals or automakers show low ones in good years. That is exactly the trap: a low P/E on record profits can be expensive if earnings are peaking right now.
Where the P/E misleads
- Meaningless when the company makes a loss
- One-off effects (selling a division, write-downs) distort earnings
- Debt doesn't enter the picture — that's what EV/EBIT is for
- Banks and insurers are often better judged on book value
So treat the P/E as one building block among several. If you want a daily overview of metrics across ~1,800 stocks, written in plain language, that is what our StockPilot AI beta does.
Risk notice: the content on this page is general information, not investment advice. Securities fluctuate in price and losses up to total loss are possible. Make investment decisions responsibly on your own or with a licensed adviser.
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FAQ
How is the P/E ratio calculated?
Share price divided by earnings per share. A $100 share with $5 EPS has a P/E of 20.
What is a good P/E ratio?
It depends on industry, growth and market conditions. Meaningful comparisons are against competitors, the company's own history, and the overall market.
Is a low P/E a buy signal?
No. A low P/E can also mean the market expects falling earnings. It is one metric, not a recommendation.
What is the PEG ratio?
The P/E divided by expected annual earnings growth in percent. It relates valuation to growth, but is only as good as the growth estimate.
What does a negative P/E mean?
The company is losing money. The P/E is not meaningfully interpretable in that case.
Updated: November 10, 2026 · Author: Kay Conrad, Gemivo (Lübeck, Germany)