The Price-to-Earnings (P/E) ratio is one of the most widely used stock valuation metrics. It compares a company's current share price to its earnings per share (EPS). A high P/E suggests investors expect high future growth while a low P/E may indicate an undervalued stock or slow growth. P/E ratio helps investors decide if a stock is overvalued or undervalued relative to its earnings.
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/P/E Ratio Calculator
P/E Ratio Calculator — Price to Earnings Ratio
Determine the Price-to-Earnings valuation multiple of a stock.
P/E Ratio Calculator
Maturity Projections
Price-to-Earnings (P/E) Multiplex
Earnings Yield (%)%
Frequently Asked Questions (FAQ)
What is a good P/E ratio for Indian stocks?+
What is the difference between trailing P/E and forward P/E?+
What does a negative P/E ratio mean?+
Is a low P/E ratio always better?+
What is the Nifty 50 average P/E ratio?+
How is P/E ratio used for stock selection?+
What is P/E Ratio?
Calculate the Price-to-Earnings (P/E) ratio of a stock to evaluate its market valuation and compare it against industry peers to find value.
How to Use This Calculator
- Step 1: Enter your Stock Price
- Step 2: Enter your Earnings per Share (EPS)
- Step 3: Review the instant results and the visual breakdown chart below
- Step 4: Adjust any value to compare scenarios, and download the full report as a PDF
Example Calculation: P/E Ratio Example Valuation
This table shows a realistic example calculation based on standard parameters. Enter your custom numbers in the sliders above to compare results.
| Company | Stock Price | EPS | P/E Ratio | Verdict |
|---|---|---|---|---|
| Stock A | ₹500 | ₹25 | 20 | Fairly valued |
| Stock B | ₹1000 | ₹20 | 50 | Expensive |
| Stock C | ₹200 | ₹40 | 5 | Potentially cheap |
What is a Good P/E Ratio?
Average P/E ratios vary significantly by sector. Growth-oriented sectors like IT/Tech trade at much higher multiples compared to banking or infrastructure sectors.
| Industry | Average P/E |
|---|---|
| IT/Technology | 25-40 |
| Banking | 10-20 |
| FMCG | 30-50 |
| Pharma | 20-35 |
| Infrastructure | 15-25 |
P/E Ratio Valuation Insights
Mathematical Formula:
P/E Ratio = Current Market Price per Share / Earnings Per Share (EPS)
Valuing income stocks too? Read our guide on what dividend yield is and how to read it, or try the dividend yield calculator.