P/E Ratio Calculator: Price to Earnings, Forward P/E & PEG

What this P/E ratio calculator does

Pick a tab for the ratio you want. The P/E tab takes a share price and the earnings per share of the last 12 months. The forward P/E tab swaps in the EPS analysts expect for the next 12 months. The PEG tab adds the yearly earnings growth you expect and divides the P/E by it. Every tab can also work from company totals: switch "Calculate from" to market cap and net income when those are the figures you have. The result shows the ratio, a valuation label, the earnings yield and the share price that matches a target P/E you choose.

Worked example

A share trades at $90 and earned $5 per share over the last 12 months. The P/E is 18.00 ($90 / $5), which lands in the fair value band, and the earnings yield is 5.56%. That P/E sits 10.91% above the long-run S&P 500 average of 16.2. Analysts expect EPS of $6 next year, so the forward P/E is 15.00. With expected growth of 12% a year the PEG ratio is 1.50 (18 / 12), which the calculator labels pricey. At a target P/E of 15 the matching price is $75, and at a PEG of 1 it is $60.

The P/E in plain words

Think of the P/E as a payback time. At a P/E of 18 you pay $18 for every $1 of yearly profit, so if profit stayed flat it would take 18 years of earnings to add up to the $90 share price. A P/E of 10 shortens that to 10 years and a P/E of 30 stretches it to 30. Growth changes the picture: if profit per share rises 12% a year from $5, the combined earnings pass $90 after about 10 years instead of 18. That gap is exactly why the PEG tab exists, since a high P/E can be reasonable for a company whose profit grows fast.

How the cheap to expensive labels are set

The labels are rules of thumb taken from published sources, not a verdict on any single stock. For the P/E and forward P/E the calculator uses four bands: below 10 is cheap, 10 to 20 is fair value, 20 to 25 is pricey and 25 or more is expensive. The fair band follows the widely quoted consensus that a P/E of about 10 to 20 is fairly priced, and the long-run S&P 500 average of 16.23 (Robert Shiller's data going back to 1871) falls inside it. Investor education sources commonly describe a P/E above 25 as expensive or speculative. For PEG the bands follow Peter Lynch in One Up on Wall Street: a fairly priced stock has a P/E equal to its growth rate (PEG 1), a P/E of half the growth rate (PEG 0.5) is very positive and twice the growth rate (PEG 2) is very negative.

Trailing P/E versus forward P/E

The trailing P/E uses profit the company has already reported, so it is a fact but looks backward. The forward P/E uses a forecast, so it looks ahead but depends on estimates that can be wrong. When earnings are expected to grow, the forward P/E is lower than the trailing one: $90 over $5 is 18, but $90 over an expected $6 is 15. A forward P/E far below the trailing P/E means the market price already assumes strong growth, so check how realistic that growth is before relying on the lower number.

When the P/E is not meaningful

A company that lost money has negative earnings, and dividing a price by a loss gives a negative number that says nothing about value. The calculator therefore shows n/a and a short note instead of a negative P/E, which matches how most financial data sites report it. The same applies to zero earnings and, in the PEG tab, to zero or negative expected growth: a PEG of 18 / 0 or 18 / -5 has no useful reading.

One stock's P/E versus the market's CAPE

The market-wide valuation you often see in the news is the Shiller P/E, or CAPE: the S&P 500 price divided by the average inflation-adjusted earnings of the previous 10 years, which smooths out one unusually good or bad year. Its long-run average is 17.42 and its median 16.13 (Robert Shiller's data since 1871), with a low of 4.78 in December 1920 and a peak of 44.19 in December 1999. In September 2026 it stood above 41, so the market as a whole traded far above its history. The CAPE describes the whole market, not one company: use this calculator for the stock itself and keep the CAPE in mind as the backdrop.

Why a low P/E can be a trap

Peter Lynch warned in One Up on Wall Street that cyclical companies, such as carmakers, steelmakers, airlines and chemical groups, turn the usual reading upside down. Their profit peaks at the top of the economic cycle, which pushes the P/E down just before earnings fall. A carmaker on a P/E of 6 at the height of a boom can be a loss-maker two years later, while the same share on a high P/E in a recession may be close to the bottom. For these companies, look at profit across a full cycle rather than at one year.

How to check a real stock in four steps

• Look up the share price and the EPS (TTM) on a finance site or in your broker's app.
• Enter both in the P/E tab and read the label and the gap with the market average.
• Switch to the forward P/E tab and enter the expected EPS to see whether profit should rise or fall.
• Open the PEG tab, enter the 5-year growth estimate and check whether that growth justifies the price.

When this calculator is most useful

• Screening a stock: see in seconds whether a P/E of 18 or 35 is modest or rich against the market average.
• Growth versus value: use PEG to compare a fast grower on a P/E of 30 with a slow grower on 12.
• Setting a buy price: enter a target P/E to find the price at which the stock would meet your valuation.
• Comparing with bonds or savings: the 5.56% earnings yield of a P/E of 18 can be set against a savings rate.

Common mistakes to avoid

• Comparing P/E ratios across sectors: banks and software companies trade on very different normal multiples.
• Using one exceptional year of growth: a one-off 60% jump makes the PEG look far cheaper than a sustainable 3 to 5-year rate would.
• Trusting a low P/E blindly: earnings may be about to fall, which makes a cheap-looking P/E a value trap.
• Using a one-off profit: a large asset sale can inflate EPS for one year and make the P/E look lower than it really is.

What this calculator does not do

• It does not look up live prices or earnings; you enter every figure yourself.
• It does not adjust for debt, cash or one-off items, which the P/E ignores by design.
• It is a valuation math tool, not investment advice.

Supporting calculators

• Big tech history: use the Magnificent 7 Calculator to see what investing in the richly valued mega caps would have returned in the past.
• Return after you buy: use the ROI Calculator to measure the total and annualized return of a stock you bought at a given price.
• Yield after inflation: use the Real Rate of Return Calculator to see what an earnings yield or interest rate is worth once inflation is taken out.