Price to Sales Ratio Calculator: Evaluate Stock Value Easily
Price-to-Sales (P/S) divides share price by sales per share, letting you compare what investors pay for each dollar of revenue. A P/S near the S&P 500 median of 2.3 signals average valuation (Macrotrends, 2023). Enter price and sales, press “Calculate,” and the tool shows the ratio instantly.
Price to Sales Ratio Calculator
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How to use the tool
Share Price (USD) – type the current market price per share. Sample inputs: 27.40 or 150.80.
Sales Per Share (USD) – add the company’s trailing-12-month revenue per share. Samples: 6.10 or 25.75.
Click Calculate to view your Price-to-Sales Ratio.
Formula
$$\text{Price-to-Sales Ratio}= rac{\text{Share Price}}{\text{Sales Per Share}}$$
Example calculations
27.40 ÷ 6.10 = 4.49
150.80 ÷ 25.75 = 5.86
Quick-Facts
Median P/S for the S&P 500: 2.3 (Macrotrends, 2023).
Tech firms average P/S ≈ 4.6, while utilities sit near 1.5 (Damodaran, 2023).
P/S above 10 is “extremely expensive” by Morningstar methodology (Morningstar, 2022).
Public companies report sales in quarterly 10-Q filings (SEC Form 10-Q).
FAQ
What does a low P/S ratio mean?
A ratio below the industry average suggests the market values each revenue dollar cheaply, signalling potential undervaluation when fundamentals are stable (Investopedia, 2023).
How often should you recalculate P/S?
Update after every quarterly earnings release because new revenue data changes sales per share (SEC Form 10-Q).
Is P/S useful for unprofitable firms?
Yes. “Revenue is the only clean number when earnings are negative” (Damodaran, 2020). P/S lets you compare growth companies lacking profits.
Can P/S replace P/E?
No. P/S ignores costs and margins; pair it with P/E or gross margin for a fuller view (CFI, 2022).
What counts as a good P/S in retail?
Retail chains typically trade between 0.3 and 1.0; numbers above 2 may flag overpricing (NYU Stern Retail Data, 2023).
How do share buybacks affect P/S?
Buybacks shrink shares outstanding, raising sales per share and lowering the ratio even if revenue stays flat (Harvard Business Review, 2022).
Does currency matter for international stocks?
Use the same currency for price and sales; convert with current FX rates to avoid distorted ratios (OECD Exchange Rate Guide, 2023).
Important Disclaimer
The calculations, results, and content provided by our tools are not guaranteed to be accurate, complete, or reliable. Users are responsible for verifying and interpreting the results. Our content and tools may contain errors, biases, or inconsistencies. We reserve the right to save inputs and outputs from our tools for the purposes of error debugging, bias identification, and performance improvement. External companies providing AI models used in our tools may also save and process data in accordance with their own policies. By using our tools, you consent to this data collection and processing. We reserve the right to limit the usage of our tools based on current usability factors. By using our tools, you acknowledge that you have read, understood, and agreed to this disclaimer. You accept the inherent risks and limitations associated with the use of our tools and services.
