Stock PE Forward PE and PB Ratio Calculator
Computes price to earnings (P/E), forward P/E and price to book (P/B) fundamentals of a stock from current price, EPS and book value per share.
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P/E and P/B: the two pillars of fundamental analysis
P/E (Price-to-Earnings) tells you how much the market is willing to pay for each R$ 1 of annual profit: P/E = price / EPS. P/B (Price-to-Book, or P/VP in Portuguese) does the same against accounting net worth per share: P/B = price / BVPS. Take a stock at R$ 30 with EPS of R$ 3 and book value of R$ 20. That works out to P/E = 10 and P/B = 1.5. As a rough guide, a P/E < 10 reads as cheap while P/E > 30 is expensive, with growth already baked into the price. On the P/B side, anything < 1 means the stock trades below book value, which is common for banks and mature industrials, and > 2 signals investors are paying a premium for intangibles or growth. Brazilian banks like ItaΓΊ and Bradesco usually trade around P/E 5β8 and P/B 1β1.5, whereas tech names like NVIDIA push into P/E 20+ and P/B 10+.
Applications and context
These are bread-and-butter numbers in fundamental analysis and turn up in every stock screener, from Status Invest to Investidor10 and Simply Wall St. They also underpin value investing in the Graham/Buffett tradition. Benjamin Graham's "Defensive Investor" formula, for one, asked for P/E < 15 and P/E Γ P/B < 22.5. They earn their keep when you're comparing companies within a sector, hunting for the undervalued ones, or steering clear of stocks priced for a bubble.
FAQ
What is a "good" P/E? There's no single right answer. Hold it up against the sector median and the company's own track record. A P/E of 15 looks cheap for tech and pricey for a bank.
Why does P/B < 1 not always indicate a bargain? Sometimes it's flagging a damaged business, a book value that's been overstated, or losses the market already sees coming. Check ROE and the earnings trend alongside it before drawing conclusions.
When do P/E and P/B stop working? They break down for companies running losses (negative P/E), for ones loaded with intangibles like software or brands that never hit the books, and for those carrying extreme leverage. In those cases reach for EV/EBITDA, P/S, or a DCF instead.
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The results provided by this tool are for general informational and educational purposes only and do not constitute professional, financial, medical, legal, tax or accounting advice. Always confirm important decisions with a qualified professional and official sources.