P/E Calculator
The P/E ratio (Price-to-Earnings) is one of the most widely used valuation multiples for stocks. Use the calculator to compute the P/E ratio, estimate a target price, or find the earnings level implied by the current price.
What does the P/E ratio mean?
The P/E ratio shows how many times the company's annual earnings are reflected in the share price. It is calculated by dividing the share price by earnings per share (EPS).
P/E = Share price / Earnings per share (EPS)
For example, if a share costs €25 and EPS is €2, the P/E ratio is 12.5. This means the investor pays 12.5 times the company's annual earnings.
How to interpret the P/E ratio?
There is no single correct P/E value — it depends on the sector, growth outlook and market conditions. Indicative reference ranges:
| P/E ratio | Interpretation |
|---|---|
| Below 10 | Low – possible undervaluation or weak future outlook |
| 10–20 | Moderate – typical for value or mature-sector companies |
| 20–30 | High – market expects growth or improving earnings |
| Above 30 | Very high – growth stock or possible overvaluation |
| Negative | Company is unprofitable – P/E is not a meaningful metric |
Always compare within the same sector and to the company's own history. A single P/E figure does not tell the full story.
Trailing vs. Forward P/E
The P/E ratio can be calculated in two ways:
- Trailing P/E — based on the last 12 months of actual earnings. Concrete, but backward-looking.
- Forward P/E — based on analysts' forecasts for the next 12 months. Forward-looking, but uncertain.
Our calculator uses whatever EPS value you enter — you can use either approach.
Limitations of the P/E ratio
- Not applicable for companies with negative earnings
- Does not account for debt levels (EV/EBIT is a better alternative)
- Cross-sector comparisons can be misleading
- One-off items can distort earnings and therefore the P/E ratio
Explore other valuation multiples on the valuation page or compare companies on the value companies page.