What is the P/E ratio?
Type the share price and the earnings per share (EPS). You get the price-to-earnings (P/E) ratio and the earnings yield. The page does not look up prices, so use the price you see.
- P/E ratio
- 18.51
At $69.41 a share and EPS of $3.75, the P/E ratio is 18.51 and the earnings yield 5.4%.
- Earnings yield
- 5.4%
P/E ratio: 18.51. At $69.41 a share and EPS of $3.75, the P/E ratio is 18.51 and the earnings yield 5.4%.
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Computes the price-to-earnings (P/E) ratio, share price ÷ earnings per share, and the earnings yield.
Example with the default inputs (Share price $69.41, Earnings per share (EPS) $3.75): At $69.41 a share and EPS of $3.75, the P/E ratio is 18.51 and the earnings yield 5.4%.
Method: P/E ratio = share price ÷ earnings per share. Earnings yield = earnings per share ÷ share price × 100.
- You type the share price and EPS; nothing is fetched.
- EPS must be more than $0; a loss gives no P/E.
- Arithmetic is exact on the typed decimals; both results show to 2 decimals, halves up.
Worked examples
Each example is checked against the calculator on every build.
- Share price $69.41, Earnings per share (EPS) $3.75 gives P/E ratio 18.509333, Earnings yield 5.40268%.Source: OpenStax, Principles of Finance, 6.5 Market Value Ratios (P/E ratio = market value per share ÷ earnings per share; $69.41 ÷ $3.75 = 18.51). https://openstax.org/books/principles-finance/pages/6-5-market-value-ratios
- Share price $20.00, Earnings per share (EPS) $2.00 gives P/E ratio 10, Earnings yield 10%.Source: U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements (P/E ratio = price per share ÷ earnings per share; a $20 stock earning $2 a share has a P/E of 10). https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements
- Share price $150.25, Earnings per share (EPS) $6.01 gives P/E ratio 25, Earnings yield 4%.
How it works
- P/E ratio = share price ÷ earnings per share
- Earnings yield = earnings per share ÷ share price × 100
Rules:
- The share price must be more than $0, at most $1 billion. EPS may be typed from −$1 billion to $1 billion.
- EPS of $0 or less gives no answer: the P/E ratio has no meaning for a loss.
- A result too large or too small to show as a number gives no answer.
- The arithmetic is exact on the decimals you type. Both results show to 2 decimals, with halves rounded up.
Assumptions
- You type the price and EPS. The page fetches no market data.
Worked examples by hand
Clear Lake Sporting Goods. Price $69.41, EPS $3.75. P/E = 69.41 ÷ 3.75 = 18.51 (18.5093…). Earnings yield = 3.75 ÷ 69.41 × 100 = 5.40%.
The SEC's example. Price $20, EPS $2. P/E = 20 ÷ 2 = 10. Earnings yield = 2 ÷ 20 × 100 = 10%.
A larger company. Price $150.25, EPS $6.01. P/E = 150.25 ÷ 6.01 = 25. Earnings yield = 6.01 ÷ 150.25 × 100 = 4%.
Other questions people ask
What is the P/E ratio?
The price-to-earnings (P/E) ratio compares a stock's price with the company's earnings per share. A P/E of 10 means buyers pay $10 for each $1 of yearly earnings.
How do I calculate the P/E ratio?
Divide the share price by the earnings per share. A stock at $20 with EPS of $2 has a P/E of 20 ÷ 2 = 10. Clear Lake Sporting Goods at $69.41 with EPS of $3.75 has a P/E of 18.51.
What is the earnings yield?
The earnings yield is EPS divided by the share price, as a percent. It is the P/E ratio turned upside down: a P/E of 10 is an earnings yield of 10%, and a P/E of 25 is 4%. It is easy to compare with bond yields.
Should I use trailing or forward EPS?
Trailing EPS uses the last 12 months of reported earnings. Forward EPS uses analysts' estimates for the next 12 months. Either works here; say which one you used when you compare stocks.
What is a good P/E ratio?
There is no single good number. A high P/E can mean buyers expect fast growth, or that the stock is expensive. Compare a company with others in the same industry and with its own past P/E.
Why is there no P/E for a loss?
When EPS is $0 or negative, price ÷ EPS has no useful meaning, so the calculator gives no answer. Analysts usually write such a P/E as "not meaningful".