P/E Ratio
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Earnings Yield
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Fair Value (Sector Avg)
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When Should You Use This?
Use the P/E ratio to quickly compare a stock's valuation to its peers, its sector, and its own historical average. A low P/E may indicate an undervalued stock, while a high P/E could signal overvaluation — or high growth expectations.
How It Works
1
Enter Stock Price
Input the current market price of the stock you want to evaluate.
2
Enter EPS
Input the trailing twelve months (TTM) earnings per share. Find this on any financial data site.
3
Compare to Sector
Optionally enter the sector average P/E to see a fair value estimate based on how peers are valued.
Frequently Asked Questions
There is no universal 'good' P/E. The S&P 500 average is around 20-25x. Growth stocks often trade at 30-50x, while value stocks trade at 10-15x. Always compare to the sector average.
Earnings yield is the inverse of P/E (EPS / Price). It lets you compare stocks to bond yields. A stock with 5% earnings yield can be compared to a 5% bond yield.
Trailing P/E uses past 12 months' earnings. Forward P/E uses analyst estimates for the next 12 months. Forward P/E is more relevant but less certain.
Yes, if the company has negative earnings (losses). A negative P/E is meaningless for valuation — use Price/Sales or Price/Book instead.
Investors pay a premium for expected future earnings growth. A stock with 40x P/E growing at 30% annually may be cheaper than a 15x P/E stock growing at 2%.