P/E & PEG Ratio Calculator

Price-to-earnings ratio = stock price ÷ earnings per share. It tells you how much investors are paying per dollar of company earnings. A P/E of 20 means $20 of price for every $1 of annual earnings. P/E is one of the most-used quick valuation metrics, but should always be compared to industry norms and history.

Historical S&P 500 P/E has averaged about 15–17, with a long-run range of about 10–25. Sectors vary widely: utilities trade around 15–20, tech often 25–40+, financials 10–14. A P/E above the long-term average suggests either rich valuations or expected high growth; below-average P/E suggests value or stagnation. Context matters more than the absolute number.

Trailing P/E uses the past 12 months of earnings (a fact). Forward P/E uses analyst estimates for the next 12 months (a forecast). Forward P/E is usually lower (because earnings are typically expected to grow) and more useful for valuation, but only as accurate as the underlying estimates.

PEG = P/E ÷ annual earnings growth rate. A PEG of 1.0 is often considered "fairly priced," below 1.0 cheap, above 1.0 expensive - though the thresholds are loose. PEG was popularized by Peter Lynch as a way to value growth stocks where a high P/E might still be justified by high growth.