How to Use the P/E Ratio Calculator
The MarketBeat P/E ratio calculator is a tool that investors and traders can use to find the current market value of a stock.
The two components of the P/E ratio are a company’s stock price and its earnings per share over a period of time (usually 12 months).
Stock price (the "P" in the P/E ratio) tells investors how much it will cost them to buy one share of a company’s stock. Earnings per share (the "E" in the ratio) gives investors an idea of how valuable those shares are.
With that in mind, how is P/E ratio calculated? The formula is:
Stock price/EPS = P/E ratio
The MarketBeat P/E calculator is intuitive, but here are step-by-step instructions:
Step 1: Enter the ticker symbol directly.
If you know the ticker symbol of the stock you’re looking for, enter that into the “Choose a Stock to Populate Sell Price” field. MarketBeat will populate the tool from its search engine to give you the current market P/E ratio for that stock.
Step 2: Enter the share price.
This is the current price at which the stock trades. You don’t need to think about it beyond that. However, note that this price will frequently change during the trading day.
Step 3: Enter the total earnings per share for the measured time period.
If you’re on the MarketBeat site, you can find this by looking at the "Earnings" tab on the profile page for the particular stock you've chosen.
P/E Ratio Calculation Examples
Here are a couple of examples using stock prices and EPS values as of January 22, 2024:
Tesla Inc. (NASDAQ: TSLA) has a share price of $208.97, and its total EPS for its last four quarters is $3.11. You can calculate its P/E ratio as follows:
208.97/3.11 = 67.19
PepsiCo Inc. (NASDAQ: PEP) has a share price of $179.03 and a total EPS of $6.65. You can calculate its P/E ratio as follows:
165.22/6.00 = 27.54