Calculate the Price-to-Earnings (P/E) ratio, earnings yield, and PEG ratio for any stock. Compare against sector benchmarks to assess valuation.
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Use current market price and trailing 12-month EPS from the company financials or stock screener.
Analyst consensus 5-year EPS growth estimate. Used for PEG ratio calculation.
Compare your stock P/E against the sector average to assess relative valuation.
P/E shows how much investors pay per rupee of earnings. PEG adjusts for growth — a PEG below 1 suggests undervaluation relative to growth. Earnings yield is the P/E inverse, useful for comparing stocks to bond yields.
It depends entirely on the sector and growth rate. High-growth tech stocks trade at 40-100x. Mature utility stocks trade at 8-15x. Compare only within sectors, and use PEG ratio to adjust for growth.
Price/Earnings to Growth ratio = P/E divided by expected EPS growth rate. PEG below 1 suggests the stock may be undervalued relative to growth. Peter Lynch popularised this as a quick valuation check.
The inverse of P/E: EPS divided by price. A P/E of 20x means earnings yield of 5%. Compare against fixed deposit rates or bond yields to judge if equities are attractive.
Trailing P/E uses last 12 months of actual earnings. Forward P/E uses projected earnings. This calculator uses trailing (actual) EPS. Forward P/E is more forward-looking but based on estimates that may be wrong.
A PE below the industry average or below 15-20 is often considered undervalued. High-growth companies may have PE above 50. The PE ratio alone is insufficient — compare with sector peers and PEG ratio.