Is this stock expensive or cheap? Calculate trailing P/E, forward P/E, PEG ratio, market capitalization, and implied price from price, EPS, shares, and expected growth — free and instant.
The defaults match the Examples tab: a $150 stock with $5.00 EPS gives a P/E of 30.00, a $15.00B market cap, and a $100.00 implied price at a target P/E of 20. Adjust to match your stock.
These worked examples use verifiable round numbers — enter them in the calculator to confirm. Results are rounded to two decimals.
Inputs: Price $150.00, trailing EPS $5.00, shares outstanding 100,000,000, target P/E 20.
Calculation: P/E = $150.00 ÷ $5.00 = 30.00. Market cap = $150.00 × 100,000,000 = $15,000,000,000 ($15.00B). Implied price = 20 × $5.00 = $100.00.
Inputs: Price $150.00, forward EPS $6.00.
Calculation: Forward P/E = $150.00 ÷ $6.00 = 25.00.
Inputs: P/E 30.00, expected earnings growth 15%.
Calculation: PEG = 30.00 ÷ 15 = 2.00.
Note: These examples are for illustration only and use round numbers. In practice, P/E values are rarely whole numbers — results are rounded to two decimals. Always verify figures against the company's actual financial statements.
EPS = net income ÷ shares outstanding (TTM for the trailing P/E)
Forward EPS = analysts' consensus estimate for the next 12 months
Growth = expected annual earnings growth (%)
Start in Mode 1: enter the current price per share and the trailing 12-month EPS. The calculator divides price by EPS to get the trailing P/E.
Enter shares outstanding to compute market cap, and a target P/E to see the implied price (target P/E × EPS). Leave either blank to skip it.
Use Mode 2 when you have next-12-month EPS estimates. A forward P/E below the trailing P/E usually means the market expects earnings growth.
In Mode 3, divide the P/E by the expected earnings growth rate. A PEG below 1 suggests the stock may be undervalued relative to growth; above 2, rich expectations.
Remember: A P/E is only meaningful relative to something — the company's own history, its industry peers, or the broad market. Always compare like with like.
The price-to-earnings (P/E) ratio compares a company's share price to its earnings per share (EPS) — how much investors pay for each $1 of earnings. A stock at $150 earning $5.00 per share has a P/E of 30: investors pay $30 for every $1 of annual profit. If earnings never grew, it would take 30 years of profits to recoup the purchase price.
A lower P/E generally means the stock is cheaper per dollar of earnings; a higher P/E means investors pay a premium, usually expecting faster earnings growth. The ratio works best for profitable, established companies — it is less useful for loss-making startups or companies with one-time charges distorting profits.
Trailing vs. forward P/E. The trailing P/E uses the last 12 months of reported EPS — objective but backward-looking. The forward P/E uses analysts' estimates for the next 12 months — forward-looking, but only as good as the estimates. A forward P/E below the trailing P/E implies expected earnings growth; above it suggests earnings are expected to decline.
There is no single "good" P/E — the right number depends on the industry, growth, and market. As a rough guide, here is how analysts typically interpret P/E levels for a mature, profitable company:
| P/E Range | Typical Interpretation |
|---|---|
| Under 10 | Value territory — or possible risk (cyclical peak earnings, declining business, heavy debt) |
| 10 – 17 | Moderate — common for mature, stable companies with modest growth |
| 17 – 25 | Growth premium — investors expect above-average earnings growth |
| 25+ | High expectations — priced for strong, sustained growth, leaving little room for error |
Industry context matters. As a rough reference, the S&P 500 has historically traded around 21× earnings; technology companies often trade at 25–35×, banks at 10–14×, utilities at 15–20×, and retail at 15–25×. A utility at 15 might be expensive while a tech stock at 25 could be a bargain — the multiples reflect different growth rates, margins, and risk profiles.
The most useful comparisons are within the same industry and against the company's own five-year average. A stock trading well below its norm and its peers may be undervalued — or the market may be pricing in deteriorating fundamentals. Always dig into why before concluding it is cheap.
The PEG ratio adjusts the P/E for growth: PEG = P/E ÷ expected earnings growth rate. In the worked example, a P/E of 30 with 15% expected growth gives a PEG of 2.00 (30 ÷ 15). As a rough guide, a PEG under 1 suggests the stock may be undervalued relative to growth, 1–2 is fair, and above 2 is rich.
The PEG is only as reliable as the growth estimate feeding it — and analysts' long-term forecasts are frequently optimistic. It also ignores margins, profitability trends, and management quality; two companies with identical PEGs can be radically different investments.
Where the P/E fails. Negative earnings: the ratio is meaningless (reported as "N/A") — use price-to-sales or EV/EBITDA instead. Cyclical companies: peak earnings at the top of a cycle produce an artificially low P/E right before earnings collapse. One-time charges: they distort EPS, hiding ongoing earning power. Normalize earnings and look at the full picture — valuation ratios alone do not determine whether a stock is a good investment.
⚠️ Educational Use Only: This calculator is for educational purposes and is not investment advice. Valuation ratios alone do not determine whether a stock is a good investment — research the fundamentals, industry, and your own financial situation first.
When evaluating a stock, look beyond the P/E: review earnings growth and quality, margins, debt, free cash flow, and competitive position. A valuation multiple is a starting point for research, never a conclusion — consider speaking with a qualified financial advisor before making investment decisions.