Graham Number Calculator

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Trailing twelve-month (TTM) diluted EPS. Use earnings attributable to common shareholders. Exclude large one-off items for a cleaner estimate.
Total shareholders equity minus preferred equity, divided by shares outstanding. For a more conservative estimate, subtract goodwill and intangibles (tangible BVPS).
The stock's current trading price. Used to calculate the margin of safety and compare against the Graham Number.
Graham's original maximum P/E was 15. Lower this to be more conservative, or raise it for growth-oriented stocks. The classic formula uses 15.
Graham's original maximum P/B ratio was 1.5. The product of P/E and P/B must be at most 22.5 in the standard formula.
Currency
Graham NumberModerately Undervalued
$58.09

Maximum price Benjamin Graham considered reasonable to pay

Margin of Safety31.1%
Implied P/E at Graham Number11.62
Implied P/B at Graham Number1.94
P/E x P/B at Current Price10.67
Graham SignalMeets Graham criteria - potentially undervalued
31.1% %
Significantly Overvalued<-25%Slightly Overvalued-25%-0%Near Fair Value0%-15%Moderately Undervalued15%-33%Deeply Undervalued33%+

Graham Number: $58.09 vs. market price $40.00

  • The Graham Number of $58.09 is the maximum price consistent with Benjamin Graham's conservative P/E and P/B limits (15 x 1.5 = 22.5).
  • At $40.00, the stock trades 31.1% below the Graham Number, providing a margin of safety.
  • The P/E x P/B product is 10.67, within Graham's limit of 22.5.
  • The Graham Number is a blunt screening tool. It works best for stable, asset-heavy companies; it does not account for growth, competitive moats, or free cash flow generation.

Next stepThe stock passes the Graham Number screen. Before buying, verify earnings quality, check the balance sheet for hidden liabilities, and run a discounted cash flow analysis as a cross-check.

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