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PEG ratio
(redirected from PEG ratios)

   Also found in: Wikipedia, Hutchinson 0.02 sec.
PEG Ratio

PEG ratio

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.


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