Graham Number Calculator



The Graham Number Calculator allows you to estimate the maximum “intrinsic” value of a stock based on the investment principles of Benjamin Graham, considered the father of value investing.
This indicator combines earnings per share (EPS) and book value per share (BVPS) to identify the price limit beyond which a stock may be considered overvalued by a prudent investor.

The app is an essential tool for value investors, financial analysts, and finance enthusiasts who want to apply rational and disciplined valuation criteria to select stocks at a fair or discounted price relative to their true value.

How it Works

The calculation is based on the original formula devised by Benjamin Graham: Graham Number=22.5×EPS×BVPStext{Graham Number} = sqrt{22.5 times text{EPS} times text{BVPS}}Graham Number=22.5×EPS×BVPS​

where:

  • EPS (Earnings Per Share) represents the earnings per share;
  • BVPS (Book Value Per Share) is the book value per share, i.e., the net asset value divided by the number of shares.

The app automatically calculates the Graham Number, displaying the value in euros and providing a clear explanation of its practical meaning for the investor.

Interpreting the Results

  • If the market price of the stock is below the Graham Number, the stock can be considered undervalued and potentially attractive for a prudent investment.
  • Conversely, if the price is above, the stock may be overvalued, indicating a risk of paying too much relative to the company’s actual value.

Why It’s Useful

The Graham Number is a very useful tool for:

  • determining a maximum purchase price for solid and profitable stocks;
  • applying the principles of value investing, avoiding decisions based solely on market trends or speculation;
  • evaluating the combination of profitability and financial security;
  • comparing similar companies in stable or cyclical sectors to select the most attractive options.

This approach promotes a rational and long-term investment strategy, focused on capital protection and sustainability of gains.

Additional Features

The results are displayed in a dedicated container that is clear and professional, with the option to quickly copy data to the clipboard, ideal for analysis reports, spreadsheets, or valuation comparisons among multiple stocks.