During the past 13 years, Fairfax Financial Holdings's highest 3-Year average EPS without NRI Growth Rate was 217.70% per year. The lowest was -88.50% per year. And the median was 13.80% per year.
Fairfax Financial Holdings (OTCPK:FRFHF) PE Ratio Explanation
The PE Ratio can be viewed as the number of years it takes for the company to earn back the price you pay for the stock. For example, if a company earns $2 a share per year, and the stock is traded at $30, the PE Ratio is 15. Therefore it takes 15 years for the company to earn back the $30 you paid for its stock, assuming the earnings stays constant over the next 15 years.
In real business, earnings never stay constant. If a company can grow its earnings, it takes fewer years for the company to earn back the price you pay for the stock. If a company's earnings decline it takes more years. As a shareholder, you want the company to earn back the price you pay as soon as possible. Therefore, lower P/E stocks are more attractive than higher P/E stocks so long as the PE Ratio is positive. Also for stocks with the same PE Ratio, the one with faster growth business is more attractive.
If a company loses money, the PE Ratio becomes meaningless.
To compare stocks with different growth rates, Peter Lynch invented a ratio called PEG Ratio. PEG Ratio is defined as the PE Ratio divided by the growth ratio. He thinks a company with a PE Ratio equal to its growth rate is fairly valued. Still he said he would rather buy a company growing 20% a year with a PE Ratio of 20, instead of a company growing 10% a year with a PE Ratio of 10.
Because the PE Ratio measures how long it takes to earn back the price you pay, the PE Ratio can be applied to the stocks across different industries. That is why it is the one of the most important and widely used indicators for the valuation of stocks.
Investors need to be aware that the PE Ratio can be misleading a lot of times, especially when the underlying business is cyclical and unpredictable. As Peter Lynch pointed out, cyclical businesses have higher profit margins at the peaks of the business cycles. Their earnings are high and PE Ratios are artificially low. It is usually a bad idea to buy a cyclical business when the PE Ratio is low. A better ratio to identify the time to buy a cyclical businesses is the PS Ratio.
PE Ratio can also be affected by non-recurring-items such as the sale of part of businesses. This may increase for the current year or quarter dramatically. But it cannot be repeated over and over. Therefore PE Ratio without NRI is a more accurate indication of valuation than PE Ratio.
Fairfax Financial Holdings PE Ratio Related Terms
Fairfax Financial Holdings PE Ratio Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Insurance - Property & Casualty subindustry, Fairfax Financial Holdings's PE Ratio, along with its competitors' market caps and PE Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Fairfax Financial Holdings PE Ratio vs Insurance Industry
For the Insurance industry and Financial Services sector, Fairfax Financial Holdings's PE Ratio distribution charts can be found below:
* The bar in red indicates where Fairfax Financial Holdings's PE Ratio falls into.
The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). It is the most widely used ratio in the valuation of stocks.
Fairfax Financial Holdings's Share Price of today is $1682.034. Fairfax Financial Holdings's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Mar. 2026 adds up the quarterly data reported by the company within the most recent 12 months, which was $202.33.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
It can also be calculated from the numbers for the whole company:
There are at least three kinds of PE Ratios used by different investors. They are Trailing Twelve Month PE Ratio, Forward PE Ratio, or PE Ratio without NRI. A new PE Ratio based on inflation-adjusted normalized PE Ratio is called Shiller PE Ratio, after Yale professor Robert Shiller.
In the calculation of PE Ratio, the earnings per share used are the earnings per share over the past 12 months. For Forward PE Ratio, the earnings are the expected earnings for the next twelve months. In the case of PE Ratio without NRI, the reported earnings less the non-recurring items are used.
For Shiller PE Ratio, the earnings of the past 10 years are inflation-adjusted and averaged. Since it looks at the average over the last 10 years, Shiller PE Ratio is also called PE10.
Fairfax Financial Holdings (FRFHF) has a PE Ratio of 8.31 as of Jul. 04, 2026. P/E ratio is the ratio of share price to a company's earnings per share. View historical data on Fairfax Financial Holdings and its competitors. This is near median its historical median of 7.83. Over the past decade, Fairfax Financial Holdings' PE Ratio has ranged from 3.27 to 36,216.32.
Is Fairfax Financial Holdings' PE Ratio too high?
Fairfax Financial Holdings' current PE Ratio of 8.31 is near median its 10-year median of 7.83. Over the past 10 years, this metric has ranged from a low of 3.27 to a high of 36,216.32. Overall, Fairfax Financial Holdings has a GF Score™ of 78/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Fairfax Financial Holdings' PE Ratio compare to CB and PGR?
Fairfax Financial Holdings' PE Ratio of 8.31 can be compared against companies in the Insurance industry. Historically, Fairfax Financial Holdings' own PE Ratio has ranged from 3.27 to 36,216.32 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good PE Ratio for an Insurance company?
A good PE Ratio depends on the Insurance industry context. However, PE Ratio should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high PE Ratio mean?
A high PE Ratio can signal that a stock is expensive relative to its fundamentals. P/E ratio is the ratio of share price to a company's earnings per share. View historical data on Fairfax Financial Holdings and its competitors. Fairfax Financial Holdings's current PE Ratio is 8.31, which is near median its own 10-year median of 7.83. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Fairfax Financial Holdings stock overvalued right now?
Based on GuruFocus' analysis, Fairfax Financial Holdings (FRFHF) is currently considered Fairly Valued. The stock's GF Value™ is $1,512.00, compared to a current price of $1,682.03 — trading 11.2% above its estimated fair value. The current PE Ratio is 8.31, which is near median its 10-year median of 7.83. Fairfax Financial Holdings' overall GF Score™ is 78/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is PE Ratio calculated?
PE Ratio is calculated from a company's financial statements. For Fairfax Financial Holdings (FRFHF), the current PE Ratio is 8.31 as of Jul. 04, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Fairfax Financial Holdings (FRFHF) Overvalued in 2026?
Based on GuruFocus' analysis, Fairfax Financial Holdings stock appears to be overvalued.
The current stock price of $1,682.03 is trading 11.2% above its estimated GF Value™ of $1,512.00.
GuruFocus considers Fairfax Financial Holdings to be Fairly Valued.
Key valuation signals for FRFHF:
PE Ratio: 8.31 (near median its 10-year median of 7.83)
GF Value™: $1,512.00 vs. price of $1,682.03 (11.2% above fair value)
No single metric tells the full story. See the FRFHF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Fairfax Financial Holdings provides reinsurance and property and casualty insurance in Canada, the United States, and other international markets. The company also has some noninsurance operations such as restaurants. Fairfax has been led by Prem Watsa, its chair and CEO, since its formation in 1985.
78GF Score
Get the complete analysis for FRFHF
PE Ratio is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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