Price to Earnings Ratio Calculator
What Is the Price to Earnings Ratio?
The price-to-earnings (P/E) ratio measures a company's share price relative to its earnings per share (EPS). Often called the price or earnings multiple, the P/E ratio helps assess the relative value of a company's stock. It's handy for comparing a company's valuation against its historical performance, against other firms within its industry, or the overall market.
Key Takeaways
- The price-to-earnings (P/E) ratio is the proportion of a company's share price to its earnings per share.
- A high P/E ratio could mean that a company's stock is overvalued or that investors expect high growth rates.
- Companies with no earnings or are losing money don't have a P/E ratio because there's nothing to put in the denominator.
- The two most used P/E ratios are forward and trailing P/E.
- P/E ratios are most valuable when comparing similar companies in the same industry or for a single company over time.
**Disclaimer:** This financial calculator is provided for illustrative purposes only. The calculations are based on assumptions and estimates, and actual results may vary. The calculator does not constitute financial advice and should not be solely relied upon for making financial decisions. Users are advised to consult with a financial advisor for personalized advice.
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