Price-to-Sales Ratio Calculator (P/S Ratio)
The price-to-sales (P/S) ratio measures how much investors pay per dollar of annual revenue. Enter the current stock price and trailing-twelve-months revenue per share to compute P/S and see where it sits on the valuation spectrum — from deeply cheap to speculative.
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Growth premium
- 1
P/S ratio
50 ÷ 8 = 6.25Stock price divided by annual revenue per share.
How does this calculator work?
P/S = Stock Price ÷ Revenue Per Share (or Market Cap ÷ Annual Revenue). Below 1 is often cheap; 2–4 is fair for most industries; above 8 implies the market is pricing in strong future growth. Always compare within the same sector and combine with profitability metrics — revenue alone does not reveal whether a business is economically viable.
Formula
How this is calculated
The price-to-sales ratio divides the stock price by the revenue generated per share (total annual revenue ÷ diluted shares outstanding). Unlike P/E, it works even when a company is unprofitable, making it widely used for growth stocks, early-stage businesses, and capital-intensive sectors where margins are thin or negative.
Benchmark ranges differ sharply by industry. Technology and SaaS companies commonly trade at 5–20× because of their high-margin, scalable models; retailers and manufacturers often sit below 1–2×. A P/S below 1 can indicate a bargain, or it can reflect genuine business problems — always investigate why the multiple is low. Above 8 the market is pricing in substantial future growth; if that growth fails to materialise, the stock can re-rate sharply downward.
P/S ignores margins, debt, and capital intensity. Use it alongside P/E, EV/EBITDA, and free-cash-flow yield for a fuller picture. Always compare within the same sector, and use trailing-twelve-months (TTM) revenue for the most current reading — annual report figures can lag by up to a year.
Frequently asked questions
There is no universal threshold. For technology and SaaS companies, 5–15× can be reasonable; for retail or manufacturing, 0.5–2× is typical. Compare against sector peers and the company's own historical range — industry, growth rate, and margin profile all matter more than any single absolute number.
Revenue per share = Total Annual Revenue ÷ Diluted Shares Outstanding. Both figures appear in quarterly earnings releases and annual reports. Use trailing-twelve-months (TTM) revenue for the most current view, and diluted shares to account for options, warrants, and convertibles that could dilute existing holders.
P/E uses net earnings in the denominator and is undefined when a company loses money. P/S uses revenue, which is harder to manipulate and always positive for a trading business. The trade-off is that P/S ignores costs entirely, so a loss-making company can look cheap on P/S while being expensive on any profitability measure.
Also known as
TG we-Calculate Editorial Team. (2026). Price-to-Sales Ratio Calculator (P/S Ratio) [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/price-to-sales-ratio-calculator
TG we-Calculate Editorial Team. "Price-to-Sales Ratio Calculator (P/S Ratio)." TG we-Calculate. 2026. https://we-calculate.com/calculator/price-to-sales-ratio-calculator.
TG we-Calculate Editorial Team, "Price-to-Sales Ratio Calculator (P/S Ratio)," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/price-to-sales-ratio-calculator
@misc{wecalculate_price_to_sales_ratio_calculator, title = {Price-to-Sales Ratio Calculator (P/S Ratio)}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/price-to-sales-ratio-calculator}}, year = {2026}, note = {TG we-Calculate} }
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