The Microsoft PE ratio based on its reported earnings over the past 12 months is 33.97. The shares last closed at $449.78. The PE ratio (or price-to-earnings ratio) is the one of the most popular valuation measures used by stock market investors. It is calculated by dividing a company's price per share by its earnings per share.The PE ratio can be seen as being expressed in years, in the sense that it shows the number of years of earnings which would be required to pay back the purchase price, ignoring inflation. So in general terms, the higher the PE, the more expensive the stock is.