Price to Earnings Ratio Calculator

Wall Street Valuation & Price-to-Earnings Multiple Metrology

The Price-to-Earnings Ratio measures how many dollars investors are willing to pay for every single dollar of annual corporate profit generated by a company.

Core Equity Valuation Formulas

• Standard P/E Ratio: P/E = Market Price per Share (PPS)Earnings per Share (EPS) = Market CapitalizationNet Income

• Earnings Yield: Earnings Yield \% = EPSShare Price × 100 = (1) / (P/E) × 100

• Price/Earnings to Growth (PEG Ratio): PEG = P/E RatioAnnual EPS Growth Rate (\%)

• Implied Share Price: PPS_fair = Target P/E Benchmark × EPS

Trailing P/E vs Forward P/E vs Shiller CAPE

• Trailing P/E (TTM): Uses actual reported financial results over the past 4 fiscal quarters. Free from subjective analyst forecasting biases.

• Forward P/E (NTM): Uses consensus Wall Street analyst consensus earnings estimates for the upcoming 12 months.

• Shiller CAPE: Divides current stock price by 10-year inflation-adjusted average earnings to smooth out economic business cycles (S&P 500 long-term historical mean is ~16.5x to 17.5x).

How to Use This Calculator

Enter your P/E Valuation Methodology — choose from Trailing P/E (TTM Past 12 Months EPS), Forward P/E (Next 12 Months Projected EPS), Firm Basis (Market Cap ÷ Net Income), Market Share Price () (e.g. 120.00 in ), Earnings Per Share (EPS) (e.g. 6.00 in /share), Expected Annual EPS Growth Rate (for PEG) (e.g. 15.0 in %), Total Market Capitalization () (e.g. 24000000000 in ), and Total Net Income () (e.g. 1200000000 in ). Results update instantly as you type — adjust any value to compare scenarios.

The Formula

Formula Reference: Price to Earnings Ratio Calculator

Input variables:

peBasis — P/E Valuation Methodology

sharePrice — Market Share Price ()

earningsPerShare — Earnings Per Share (EPS)

epsGrowthRatePct — Expected Annual EPS Growth Rate (for PEG)

marketCap — Total Market Capitalization ()

Computed outputs:

priceToEarningsRatio — Price-to-Earnings Ratio (P/E)

pegRatio — PEG Ratio (P/E ÷ Growth Rate)

earningsYieldPct — Earnings Yield (E/P)

valuationSummary — Valuation & Benchmark Analysis

Mathematical relationships extracted from calculation logic:

eYield = safeDiv(1, pe) * 100

Standard: NIST Handbook 44 and BIPM SI unit definitions

Worked Example

Analyzing a technology stock trading at 120.00 with 6.00 annual EPS growing at 15% per year: Yields a P/E multiple of 20.00x, an earnings yield of 5.00%, and a healthy PEG ratio of 1.

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Understanding Your Result

Percentages are relative values — context determines what is "good" or "bad." A 50% discount is significant; a 50% failure rate is alarming. Percentage change and percentage points are different: moving from 4% to 5% is a 1 percentage point increase, but a 25% relative increase. When comparing percentages across different base values, always check whether absolute differences are meaningful — a 10% improvement on a large base creates more absolute value than 10% on a small base.