Stock metric explained
P/E ratio explained
The price-to-earnings ratio (P/E) shows how many years of earnings you pay for in a share. A P/E of 20 means the price is 20 times earnings per share over the last twelve months.
As of 14 Nov 2026, calculated from 5,909 stocks in the MEQIRI screener and updated daily.
- 23.6Median P/E S&P 500
- 29.3Median P/E Nasdaq 100
- 19.0Median P/E of all stocks
- 39.5P/E Apple
What the P/E ratio measures
P/E = share price / earnings per share
Earnings per share are the profit of the last twelve months divided by the number of shares. So the P/E shows how much the market pays today for each dollar of earnings.
Turn the ratio upside down and you get the earnings yield: 1 divided by the P/E. A P/E of 20 equals an earnings yield of 5 %.
Example: Apple
- Share price on 13 Nov 2026
- $356.27
- Earnings per share, last twelve months
- $9.03
- P/E ratio
- 39.5
- Earnings yield
- 2.5%
$356.27 divided by $9.03 gives a P/E of 39.5. At this price the market values Apple at about 39 years of earnings, an earnings yield of 2.5%.
Apple P/E ratio over timeWhen a P/E ratio is high
There is no fixed threshold. A P/E only becomes meaningful in comparison: with the market, with the sector and with the stock's own history.
The tables show the median, the middle value. Half of the stocks are above it, half below. Companies with a loss have no P/E and are left out.
Median P/E by index
| Index | Median P/E | Profitable stocks |
|---|---|---|
| S&P 500 | 23.6 | 477 of 499 |
| Nasdaq 100 | 29.3 | 91 of 100 |
| Dow Jones | 23.3 | 30 of 30 |
| Euro Stoxx 50 | 22.2 | 49 of 50 |
Median P/E by sector
| Sector | Median P/E | Profitable stocks |
|---|---|---|
| Financial Services | 12.5 | 915 of 974 |
| Energy | 13.7 | 212 of 265 |
| Communication Services | 17.3 | 171 of 230 |
| Real Estate | 17.3 | 260 of 324 |
| Basic Materials | 17.6 | 372 of 459 |
| Consumer Cyclical | 18.9 | 506 of 598 |
| Utilities | 20.1 | 183 of 200 |
| Consumer Defensive | 20.4 | 256 of 293 |
| Industrials | 21.9 | 884 of 1,019 |
| Technology | 28.5 | 674 of 847 |
| Healthcare | 28.5 | 380 of 700 |
Across all 4,813 profitable stocks in the MEQIRI screener, worldwide.
For comparison: Apple has a P/E of 39.5. The median of the S&P 500 is 23.6, the median of the Technology sector 28.5. How a stock's P/E compares with its own history is shown on its P/E page, with the median of recent years.
Other forms of the P/E ratio
- Forward P/E
- Share price divided by the earnings per share analysts expect for the next twelve months. For Apple that is 37.2 instead of 39.5: analysts expect earnings to rise. Estimates can be wrong.
- PEG ratio
- The P/E divided by expected annual earnings growth in percent. A PEG around 1 means P/E and growth are roughly in line. Apple has a PEG of 4.89.
- P/E with a loss
- A loss gives a negative P/E that cannot be compared. MEQIRI then shows “Loss” instead of a number. In the screener that applies to 1,045 of 5,909 stocks today.
- Adjusted P/E
- Uses earnings without one-off items such as asset sales or write-downs. MEQIRI shows it next to the P/E when one-offs distort earnings.
Where the P/E says little
- Banks and insurers
- Their earnings depend heavily on loan loss provisions and interest rates. For them MEQIRI also shows the price to book ratio (P/B) over time.
- Cyclical companies
- Carmakers, chemicals and miners earn the most at the peak of the cycle. The P/E then looks low just before earnings fall, and the reverse at the bottom.
- One-off gains
- An asset sale or a large write-down distorts one year's earnings. MEQIRI then leaves the P/E out of the score. Today that applies to 608 stocks in the screener.
- Real estate (REITs)
- Heavy depreciation on buildings depresses earnings. Price to funds from operations (FFO), which MEQIRI shows for REITs, says more.
How MEQIRI uses the P/E ratio
The P/E is one of four metrics in the valuation category of the MEQIRI Score and counts for 25% there. Valuation makes up 8% of the score, so the P/E counts for 2%. The other three are the gap to fair value, the PEG ratio and EV/EBITDA.
The lower the P/E, the more points. Between the steps in the table, points change evenly.
| P/E | Points |
|---|---|
| up to 8 | 100 |
| 15 | 82 |
| 25 | 60 |
| 35 | 35 |
| 55 and above | 10 |
With a P/E of 39.5, Apple gets 29 points today.
With a loss, a P/E below 3, one-off items in earnings or after a one-time drop in earnings, the P/E is left out. It then counts as not measured, not as bad.
Fair value uses the P/E too: half of it is earnings per share times the sector's median P/E, the other half comes from future cash flows.
All score thresholdsP/E of well-known stocks
P/E ratio FAQ
What is a good P/E ratio?
There is no fixed number. The median is a useful reference: 23.6 for the S&P 500, 29.3 for the Nasdaq 100 and 19.0 across all profitable stocks in the MEQIRI screener (as of 14 Nov 2026). A P/E below the sector median only means the market values the earnings lower. It does not say whether that is justified.
Is a high or a low P/E ratio better?
Neither is better in itself. A high P/E shows the market expects strong growth. If that growth does not come, the share price often falls sharply. A low P/E can point to a low valuation or to earnings that are about to fall.
How do you calculate the P/E ratio?
Divide the share price by the earnings per share of the last twelve months. Example Apple: $356.27 divided by $9.03 gives a P/E of 39.5.
What does a negative P/E ratio mean?
The company made a loss over the last twelve months. A negative P/E cannot be compared in a meaningful way, so MEQIRI shows “Loss” instead. That applies to 1,045 of 5,909 stocks in the screener today.
What is the difference between P/E and forward P/E?
The P/E uses earnings of the last twelve months, the forward P/E the earnings analysts expect for the next twelve months. A forward P/E below the P/E means analysts expect earnings to rise.
What is the P/E ratio of the S&P 500?
The median of its 477 profitable members is 23.6 (as of 14 Nov 2026). MEQIRI does not calculate the P/E of the index itself, weighted by market value.
What is the Shiller P/E?
The Shiller P/E (CAPE) divides the price by average inflation-adjusted earnings of the last ten years. It smooths out business cycles and is mainly used for whole markets. MEQIRI does not calculate it.
Where can I find a stock's P/E ratio?
On every stock page at MEQIRI, in detail on its P/E page with the history of recent years and its own median. In the stock screener you can show the P/E of all stocks as a column.