The index's P/E ratio depends on who defines the "E." Wall Street pros predict stellar S&P 500 earnings growth, but underlying numbers are often deeply distorted, affecting how cheap or expensive the market looks via the P/E ratio.

Using actual net income (GAAP), the index trades at about 29 times earnings. Analysts prefer alternative earnings, showing around 22 times using 2026 estimates, but adjustments ignore real expenses like stock-based pay. Investors face a buffet of earnings figures—past or forward, official or nonstandard—leading to disagreement on growth rates.

FactSet projects S&P 500 earnings of $275 a share for 2025, climbing 24% to $341 for 2026. If growth were truly that fast, the market premium should be higher, but investors likely discount the data knowing the numbers are problematic.