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Graham Number Calculator

Estimate the maximum fair price for a stock using Benjamin Graham's formula combining EPS and book value per share.

Stock Valuation Input

$

Company's earnings per share (annual)

$

Company's book value per share

$

For comparison with Graham Number

Valuation Results

Graham Number

Intrinsic Value

Current Price

Market Value

Valuation

Graham Number Formula

Graham Number = √(22.5 × EPS × BVPS)

Where 22.5 = 15 (P/E ratio) × 1.5 (P/B ratio)

Key Components:

  • EPS: Earnings per share (annual)
  • BVPS: Book value per share
  • 22.5: Graham's conservative multiplier

Interpretation:

  • Stock price below Graham Number = potentially undervalued
  • Stock price above Graham Number = potentially overvalued
  • Consider other factors before making investment decisions

Usage Tips & Limitations

Best Practices:

  • • Use with profitable companies (positive EPS)
  • • Combine with other valuation methods
  • • Consider industry averages
  • • Use annual EPS, not quarterly
  • • Verify book value accuracy

Limitations:

  • • Not suitable for growth stocks
  • • Doesn't work for loss-making companies
  • • May undervalue intangible assets
  • • Based on historical data
  • • Conservative approach may miss opportunities

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