P/E Ratio Calculator
Calculate any stock's price-to-earnings ratio and see how it stacks up against sector averages. One of the simplest ways to gauge value.
Sector Average P/E Ratios (2026 Estimates)
| Sector | Average P/E | Typical Range |
|---|---|---|
| Technology | 30.5x | 18x – 46x |
| Healthcare | 22x | 13x – 33x |
| Financial Services | 14.5x | 9x – 22x |
| Consumer Discretionary | 24x | 14x – 36x |
| Consumer Staples | 21x | 13x – 32x |
| Industrials | 20.5x | 12x – 31x |
| Energy | 11x | 7x – 17x |
| Utilities | 17.5x | 11x – 26x |
| Real Estate (REITs) | 35x | 21x – 53x |
| Materials | 16x | 10x – 24x |
| Communication Services | 18x | 11x – 27x |
| S&P 500 Average | 22.5x | 14x – 34x |
What Is the P/E Ratio?
The price-to-earnings (P/E) ratio is one of the most widely used stock valuation metrics. It tells you how much investors are willing to pay per dollar of earnings.
P/E Ratio = Stock Price ÷ Earnings Per Share (EPS)
How to Interpret P/E Ratios
- Low P/E (under 15) — May indicate the stock is undervalued, or the company has problems that justify a lower price.
- Average P/E (15–25) — Roughly in line with market averages. Neither cheap nor expensive.
- High P/E (over 25) — Investors expect high future growth, or the stock may be overpriced.
Why Sector Comparison Matters
A P/E of 30 means something very different for a tech company versus a utility. Tech stocks typically trade at higher multiples because of faster growth expectations. Always compare a stock's P/E to its sector average rather than the broad market.
Trailing vs. Forward P/E
Trailing P/E uses the last 12 months of actual earnings.Forward P/E uses analysts' projected earnings for the next 12 months. This calculator uses trailing P/E for simplicity — it's based on real data, not estimates.
Limitations of P/E
P/E doesn't work for companies with negative earnings. It also doesn't account for debt levels, cash on hand, growth rates, or industry dynamics. Use it alongside other metrics like P/B, debt-to-equity, and free cash flow yield for a complete picture.
Want to go deeper? Read our complete guide to P/E ratios →