The most common way to check whether a stock is cheap or expensive relative to its profit.
| Company | the P/E ratio | Health Score |
|---|---|---|
| Apple Inc. | 52.19x | 47.5 |
| COCA COLA CO | 37.78x ✓ | 50.5 |
✓ = better on this metric alone (lower wins). Values refresh from live data on every request.
The price-to-earnings (P/E) ratio is a company's market cap divided by its net income (equivalently, share price divided by earnings per share). It answers: "if I bought this whole company today, and it kept earning what it earns now, how many years of profit would it take to get my money back?" A P/E of 10 means roughly 10 years; a P/E of 40 means 40.
P/E = market cap ÷ net income. Because the denominator is net income, a company with negative earnings doesn't have a meaningful P/E — this is why this site's value+quality ranking excludes companies with no usable earnings figure rather than showing a nonsense negative multiple.
Lower generally means cheaper relative to current profit, but there's no universal "good" number — it depends heavily on industry and growth rate. A capital-intensive, slow-growth business and a fast-growing software company simply trade at different P/E ranges for legitimate reasons, so comparing across very different companies (or within the same sector) matters more than eyeballing a single number in isolation.
A low P/E isn't automatically a bargain — sometimes the market is correctly pricing in declining future earnings (the classic "value trap"). A high P/E isn't automatically overpriced either, if growth is fast enough to justify it. P/E works best alongside P/B, ROE, and revenue growth, not by itself.
What is the P/B ratio? What is the P/S ratio? Value, growth, and dividend stocks — what's the difference?
Not investment advice. ← All investing terms · Screen stocks yourself →