PEG ratio


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PEG Ratio

Price/Earnings-to-Growth Ratio

A ratio of a stock's valuation, that is, how expensive a stock is relative to its earnings and expected growth. It is calculated as:

PEG = Price/Earnings/Annual Earnings Growth per Share

A lower ratio indicates a less expensive stock with higher earnings and growth, while a higher ratio indicates the opposite. According to Peter Lynch, who popularized the ratio, a fairly priced stock has a ratio of 1.

PEG ratio

References in periodicals archive ?
Though most analysts calculate the PEG ratio by using forecasted earnings, Lynch prefers the conservative approach.
He says Lowe's is growing earnings around 15% a year, and shares have a P/E ratio of 15, generating a PEG ratio of 1.
The PEG ratio is calculated by taking the price-to-earnings (P/E) ratio and dividing it by the growth rate.
The following 3 companies stood out because they had both stellar fundamentals, including a low PEG ratio, and a solid business story, including strong earnings growth.
Using the PEG ratio (growth of stock divided by earnings), the group uses a proprietary fundamental software tool to evaluate stocks, which means all members are required to have basic computer skills.
The following 3 companies stood out because they had both stellar value fundamentals, including a low PEG ratio, and a solid business story, including strong earnings growth.
CHICAGO -- If you like to use a company's P/E ratio to determine its value, then you'll love using the PEG Ratio Profit Track.
The PEG ratio is a simple tool that can be useful in your search for undervalued stocks.