From the share price and earnings per share, compute the price-to-earnings (P/E) ratio to gauge stock valuation.
Input Data
Results
At a glance:The P/E ratio is the share price divided by earnings per share, showing how many years of current earnings the market price represents.
Formula
priceToEarnings = sharePrice / eps
$$\text{P/E Ratio} = \dfrac{\text{Share Price}}{\text{Earnings Per Share (EPS)}}$$How to Use
- Enter the share price.
- Enter the earnings per share (EPS).
- Read the P/E ratio.
FAQ
What is a reasonable P/E?
There is no universal number — it depends on industry, growth prospects and the market. High-growth tech stocks often trade at dozens of times and are accepted because the market expects earnings to rise fast; mature utilities and banks are usually lower. Compare with peers, the sector average and the company's own history, not the absolute value. A high P/E is not necessarily expensive, nor a low one necessarily cheap — judge with fundamentals.
What is the difference between trailing and forward P/E?
Trailing P/E uses the past 12 months' actual earnings — data is certain but it is a 'rear-view mirror'. Forward P/E uses analysts' earnings forecasts — it better reflects prospects but carries forecast uncertainty. For a growing company, forward P/E is usually lower than trailing (expected earnings rise). Use both: trailing for track record, forward for outlook.
How do I read P/E when a company is loss-making?
When EPS is negative, the P/E turns negative and is generally treated as 'meaningless' or 'not applicable' because earnings-based valuation no longer holds. This calculator returns 0 when EPS is 0. For not-yet-profitable growth or cyclical-bottom firms, investors turn to P/S, P/B or EV multiples instead.
How should I use P/E together with the PEG ratio?
P/E alone tells how many times the market pays per dollar of earnings, but ignores growth; PEG = P/E ÷ earnings growth rate (%) adjusts the P/E by growth, so firms with different growth can be compared fairly. A stock at 30x P/E but 30% growth has PEG = 1 — actually reasonable; a seemingly cheap 15x with near-zero growth has a high PEG — not cheap for its growth. A common rule: PEG around 1 is fair, below 1 possibly undervalued, well above 1 possibly pricey — but mind forecast reliability and the sector. So: read the P/E multiple first, then fold in growth via PEG.
Where do I find the P/E and EPS of a Hong Kong stock?
The EPS of a Hong Kong-listed company comes from its financial statements; the most authoritative source is the HKEX disclosure platform (HKEXnews), whose annual and interim reports list basic and diluted EPS. The share price is a live market quote; divide price by EPS yourself to get the P/E. Most financial websites and broker platforms also display the P/E directly. Watch a few points: first, know whether the shown P/E uses trailing (past 12 months) or forward (analyst forecast) earnings — different meanings; second, EPS can be distorted by one-offs (asset sales, impairments), so check for non-recurring items when reading trends; third, platforms may use different earning periods (annual, rolling four quarters) — compare on the same basis. Use the company's original filings as the base and compare with peers, the sector average and the company's own history. Make investment decisions prudently or consult a professional.
References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.