S&P 500 price-to-sales
What investors pay for each dollar of S&P 500 sales.
The S&P 500 price-to-sales is 3.65× as of July 27, 2026. Investors are paying a large premium for each dollar of index sales — a rich valuation.
Historical crashes marked on this chart (2)
The dashed red lines flag major US market crashes within this indicator’s history. Here is what happened at each and what followed.
- Global Financial Crisis (2008)
- The subprime mortgage meltdown and Lehman Brothers' collapse cut the S&P 500 about 57% into March 2009. It triggered the Great Recession, sweeping bailouts, and a decade of near-zero interest rates.
- COVID crash (2020)
- Pandemic lockdowns caused the fastest bear market ever in February–March 2020, a roughly 34% plunge in weeks. Unprecedented Fed and fiscal stimulus sparked a rapid recovery to new highs.
The gray line is the trend baseline; the ±2σ bands are the standard deviation bands used to assign the verdict.
Overview
The S&P 500 price-to-sales ratio compares the market value of the index to the trailing sales of its constituent companies. All else equal, rising sales should support higher equity prices; when price races far ahead of revenue, valuations look stretched. Since 2000 the ratio has averaged about 1.8; recent readings near 3× sit multiple standard deviations above that modern-era mean. It complements earnings-based gauges like the Shiller CAPE because sales are less volatile and less distorted by accounting or financing choices — though it says nothing about margins.
How to read it
Read against the post-2000 average near 1.8. Near or below that mean is closer to historically normal for the modern index; well above — toward 2.5–3× and beyond — means investors are paying a large premium for each dollar of revenue. Because the series is short and sector mix has shifted toward higher-margin businesses, treat extreme readings as a valuation warning alongside CAPE and the Buffett Indicator, not as a standalone timing signal.
How it's calculated
This indicator is judged against a flat historical mean. The current reading is expressed as a z-score — standard deviations from that baseline.
- Take the S&P 500 price-to-sales ratio published via multpl (sourced from S&P), quarterly.
- Judge the reading against its flat historical mean (the modern-era sample, roughly since 2000) with standard-deviation bands.
- Higher readings are more overvalued (high-bad).
Criticisms
- Price-to-sales ignores profitability — investors can pay a high multiple of revenue for low-margin businesses.
- A rising share of high-margin tech in the index structurally lifts the aggregate P/S, so some of the post-2000 uptrend is composition, not pure froth.
- Reliable index-level sales history is short (roughly since 2000), so the baseline is a modern-era mean rather than a century-long average.
Frequently asked questions
- What is a normal S&P 500 price-to-sales ratio?
- Since 2000 the S&P 500 price-to-sales ratio has averaged about 1.8. Readings near 1–1.5 have marked cheaper markets (as in 2008–09); readings around 3 or higher sit far above that modern-era mean and have historically looked stretched.
- Why look at sales instead of earnings?
- Sales are stabler and harder to massage with accounting choices than earnings, and they are not distorted by interest expense or leverage the way bottom-line profits can be. In growth-heavy markets where many firms reinvest heavily, sales can still show the underlying business even when earnings look depressed.
- How is the S&P 500 price-to-sales ratio calculated?
- It is the total market value of the S&P 500 divided by the trailing twelve-month sales of its constituents (equivalently, price per share ÷ sales per share). We use the quarterly series published via multpl from S&P data.