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Nvidia
Graham Number$38.82
Current Stock Price$229.28
EPS$7.91
Tangible Book Value per Share$8.47
P/E Ratio29.0x
P/TBV Ratio27.1x
Graham Number Valuation
For informational and educational purposes only • Not investment advice.
Compare Graham Number estimates across companies
Apple
Graham Number$34.11
Current Stock Price$336.64
EPS$8.71
Tangible Book Value per Share$5.94
P/E Ratio38.6x
P/TBV Ratio56.7x
Alphabet
Graham Number$145.62
Current Stock Price$351.66
EPS$19.91
Tangible Book Value per Share$47.34
P/E Ratio17.7x
P/TBV Ratio7.4x
Microsoft
Graham Number$128.62
Current Stock Price$535.07
EPS$17.96
Tangible Book Value per Share$40.94
P/E Ratio29.8x
P/TBV Ratio13.1x
What is the Graham Number?
The Graham Number provides a conservative valuation benchmark based on a company's earnings and tangible asset value.
It combines Earnings per Share (EPS) with Tangible Book Value per Share to estimate a price level that reflects both profitability and balance-sheet support.
Unlike a Discounted Cash Flow model, the Graham Number does not forecast future cash flows or growth. It uses current financial fundamentals to provide a simple value-investing benchmark.
Graham Number Formulas
Tangible Book Value per Share
Graham Number
Graham Constant
Valuation Gap
How the Graham Number Valuation Works
Benjamin Graham's valuation model combines a company's current earnings per share and tangible book value per share to estimate a conservative intrinsic value. Unlike discounted cash flow models, it does not forecast future growth or cash flows, making it a simple benchmark for mature, profitable businesses with meaningful tangible assets.
Determine
EPS
→
Calculate
Tangible Book Value per Share (TBVPS)
→
Apply Graham
Formula
→
Compare With
Market Price
Key Model Assumptions
• The model requires positive Earnings per Share and a positive Book Value per Share measure.
• Earnings per Share uses trailing twelve-month (TTM) earnings when available, with the latest annual EPS used as a fallback.
• Tangible Book Value is preferred because it excludes goodwill and other intangible assets. If Tangible Book Value is unavailable, the model may use Book Value instead.
• The Graham Number follows Benjamin Graham's traditional formula.
• The constant 22.5 reflects a P/E ratio of 15 and a Price-to-Book ratio of 1.5.
• The model is most meaningful for profitable companies with substantial tangible assets.
• Asset-light and high-growth companies may not be well represented by this valuation method.
• Earnings per Share uses trailing twelve-month (TTM) earnings when available, with the latest annual EPS used as a fallback.
• Tangible Book Value is preferred because it excludes goodwill and other intangible assets. If Tangible Book Value is unavailable, the model may use Book Value instead.
• The Graham Number follows Benjamin Graham's traditional formula.
• The constant 22.5 reflects a P/E ratio of 15 and a Price-to-Book ratio of 1.5.
• The model is most meaningful for profitable companies with substantial tangible assets.
• Asset-light and high-growth companies may not be well represented by this valuation method.
Step 1 — Calculate Tangible Book Value per Share
Tangible Book Value per Share = Tangible Book Value / Shares Outstanding
Tangible Book Value per Share represents the company's tangible net assets attributable to each outstanding share after excluding goodwill and other intangible assets.
Step 2 — Apply the Graham Number Formula
Graham Number = √(22.5 × EPS × Tangible Book Value per Share)
22.5 = 15 × 1.5
The Graham Number combines Earnings per Share with Tangible Book Value per Share to estimate a conservative valuation benchmark.
Earnings per Share uses trailing twelve-month (TTM) earnings when available, with the latest annual EPS used as a fallback. Tangible Book Value per Share is based on the latest available balance-sheet value.
The constant 22.5 reflects Benjamin Graham's traditional limits of a P/E ratio of 15 and a Price-to-Book ratio of 1.5.
Step 3 — Compare With the Current Market Price
Valuation Gap = Graham Number / Current Price − 1
The Graham Number is compared with the current stock price to show whether the market price trades above or below this conservative valuation benchmark.