Valuation
What is P/E Ratio (Price-to-Earnings Ratio)?
The P/E ratio measures how much investors pay for each dollar (or rupee) of a company's earnings. It's calculated by dividing the stock price by earnings per share (EPS).
Formula
P/E Ratio = Stock Price ÷ Earnings Per Share (EPS)
How to Interpret
A high P/E may indicate growth expectations; a low P/E may suggest undervaluation or fundamental issues. Always compare within the same sector.
Typical Ranges
Varies by sector. US benchmarks: S&P 500 trailing P/E ~22, Tech (NASDAQ-100) 28-40, Financials 12-18, Consumer Staples 22-30, Energy 10-15. Or international markets like India: IT 20-35, Banking 10-20, FMCG 30-50.
Find Stocks Using This Metric
Use the Equiscale Stock Screener to filter US or Indian stocks by P/E Ratio.