Enter a stock's price, EPS, book value per share and ROE to estimate fair value with P/E and P/B (vs the S&P 500, Nasdaq-100 or your sector), a residual income model, the Graham Number, PEG and dividend yield — and see where today's price sits on a 7-step scale. Every formula is shown step by step.
All examples are fictional numbers and do not describe any real company.
| Method | Fair value / value | Gap | Verdict |
|---|
The overall fair value is the median of the price estimates that could be calculated (P/E, P/B, S-RIM ω = 0.9, Graham Number), so one outlier moves it less. PEG and dividend yield are supporting signals.
Not investment advice. This calculator applies textbook formulas to the numbers you enter and is for information and education only. It cannot account for accounting differences, one-off gains, debt, buybacks, industry cycles or governance. Your investment decisions and their results are your own responsibility.
| Method | Formula | Works best for |
|---|---|---|
| P/E-based | EPS × benchmark P/E | Companies with steady earnings |
| P/B-based | BPS × benchmark P/B | Asset-heavy firms: banks, insurers, holding companies |
| S-RIM | BPS + BPS × (ROE − r) ÷ r | Companies with stable ROE |
| S-RIM, fading | BPS + excess earnings × ω ÷ (1 + r − ω) | When excess returns are expected to shrink (ω = 0.9, 0.8) |
| Graham Number | √(22.5 × EPS × BPS) | A conservative ceiling (P/E 15 × P/B 1.5) |
| PEG | P/E ÷ EPS growth (%) | Comparing growth stocks (below 1 = cheap for its growth) |
| Theoretical P/B | ROE ÷ r | Checking whether P/B is justified by ROE |
Residual income valuation says a share is worth its book value plus the present value of any earnings above what shareholders require. S-RIM is a simplified version popularized in Korea by accountant Sa Kyung-in. Shareholders want the capital they have left in the company (BPS) to earn at least the required return r. If ROE is above r, the company creates excess earnings = BPS × (ROE − r) every year; their present value is added to BPS. If they last forever you divide by r; if they fade 10% a year you use ω = 0.9. Conversely, when ROE is below r, value falls below book, so a P/B under 1 is not automatically cheap.
The "persistent" S-RIM value equals BPS × ROE ÷ r — the same as theoretical P/B (ROE ÷ r) × BPS.
The Korean S-RIM convention uses the BBB- corporate bond yield as a practical "what investors could earn instead" rate. The closest free US series is the ICE BofA BBB US Corporate Index effective yield (FRED: BAMLC0A4CBBBEY), 6.01% on Oct 29, 2026 — the default here. A more conventional US cost-of-equity approach is the 10-year Treasury yield plus an equity risk premium: 4.98% (Oct 29, 2026) + 4–5% ≈ 9–10%. A higher r gives lower S-RIM values and a lower theoretical P/B, so try both.
| Step | Price ÷ fair value | Gap |
|---|---|---|
| Deeply undervalued | 0.60 or less | −40% or less |
| Undervalued | 0.60 – 0.80 | −40% to −20% |
| Slightly undervalued | 0.80 – 0.93 | −20% to −7% |
| Fairly valued | 0.93 – 1.075 | −7% to +7.5% |
| Slightly overvalued | 1.075 – 1.25 | +7.5% to +25% |
| Overvalued | 1.25 – 1.67 | +25% to +67% |
| Deeply overvalued | above 1.67 | above +67% |
The steps are cut on a ratio (log) scale so the cheap and expensive sides are symmetric: 0.6× fair value and 1 ÷ 0.6 ≈ 1.67× are the same distance from fair.
P/E (price-to-earnings) is share price ÷ earnings per share (EPS): how many years of current earnings you pay for. P/B (price-to-book) is price ÷ book value per share (BPS): how many times its accounting net worth the stock trades at. ROE (return on equity) is net income ÷ shareholders' equity: how many cents a company earns per dollar of shareholder capital each year. They are linked by P/B = P/E × ROE.
S-RIM is a simplified residual income model popularized in Korea by accountant Sa Kyung-in (2017). Fair value = BPS + BPS × (ROE − r) ÷ r, where r is the required return. It adds the value of "excess earnings" above what shareholders require to book value. If excess earnings are expected to fade by 10% or 20% a year, a persistence factor ω = 0.9 or 0.8 is used: BPS + excess earnings × ω ÷ (1 + r − ω). The Korean method uses the BBB- corporate bond yield as r; this US version defaults to the ICE BofA BBB US Corporate Index effective yield.
No. If earnings are temporarily inflated, the industry is shrinking, or ROE is below the required return so the company destroys shareholder value, a stock can stay at a low P/E and P/B for years (a value trap). Read a low P/E together with ROE, earnings growth, dividends and debt. When ROE is below the required return, a P/B under 1 can be fair.
All values are editable above. Calculations run only in your browser; nothing you enter is stored or sent anywhere.