What Is a Good P/E Ratio?

The price-to-earnings ratio (P/E) is the most common way to gauge how expensive a stock is. It answers a simple question: how much are you paying for each dollar of the company’s yearly profit?

P/E = market value ÷ yearly net income (or share price ÷ earnings per share)

A P/E of 20 roughly means you’re paying $20 for every $1 of annual profit — or about 20 years of today’s earnings to buy the whole company.

What’s high or low?

There’s no single “good” number — it depends on growth and industry:

• Low P/E (under ~12) can mean a stock is cheap — or that the market expects profits to fall.
• Average (~15–25) is typical for stable, profitable companies.
• High P/E (30+) usually means investors expect fast growth. If that growth disappoints, the price can fall hard.

Compare a company’s P/E to its own history and to peers in the same industry — a software firm and a utility naturally trade at very different multiples. A loss-making company has no meaningful P/E (you can’t divide by negative or zero earnings), so we hide it and you’d look at price-to-sales instead.

P/E uses the current market value, so it changes daily; on Stocktoria it’s shown with an “as of” date. Screen by P/E in the stock screener .