Graham Number Calculator
Calculate stock fair value using Benjamin Graham's formula with earnings per share and book value per share
Calculate Graham Number
Trailing twelve months (TTM) earnings per share
Common shareholders' equity per share
Current market price to compare with Graham Number
Graham Number Results
Example Calculation
TD Synnex Corporation Example
Stock: TD Synnex Corporation (before 2020 Q2)
Earnings Per Share (TTM): $10.47
Book Value Per Share: $75.82
PE Ratio: 9.2 (✓ ≤ 15)
PB Ratio: 1.3 (✓ ≤ 1.5)
Graham Number Calculation
GN = √(22.5 × 10.47 × 75.82)
GN = √(22.5 × 794.14)
GN = √17,868.15
GN = $133.65
Result: Stock was trading at $101.80, indicating 31% upside potential
Graham Number Criteria
PE Ratio ≤ 15
Price-to-earnings ratio should be 15 or below
PB Ratio ≤ 1.5
Price-to-book ratio should be 1.5 or below
PE × PB ≤ 22.5
Product of PE and PB ratios should be 22.5 or below
Value Investing Tips
Only use Graham Number for profitable companies (positive EPS)
Check that stock meets Graham's criteria before applying
Consider multiple valuation methods for complete analysis
Review company fundamentals beyond just ratios
Use trailing twelve months (TTM) data for accuracy
Understanding the Graham Number
What is the Graham Number?
The Graham Number is a stock valuation metric developed by Benjamin Graham, the "father of value investing." It combines earnings per share (EPS) and book value per share (BVPS) to estimate a stock's intrinsic value or fair price.
How to Interpret Results
- •Stock Price < Graham Number: Potentially undervalued
- •Stock Price > Graham Number: Potentially overvalued
- •Stock Price ≈ Graham Number: Fairly valued
Formula Explanation
GN = √(22.5 × EPS × BVPS)
- GN: Graham Number (fair value per share)
- EPS: Earnings per share (TTM)
- BVPS: Book value per share
- 22.5: Constant derived from PE ratio of 15 × PB ratio of 1.5
Important: Graham Number works best for established, profitable companies with consistent earnings history.