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Financial ratio defined as stock price divided by sales over earnings growth. Often used in the valuation of Internet stocks. Related: PSSG.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Price-Earnings Growth Ratio
A ratio of a stock's price to its increase in earnings over a given period of time. This is used in place of the price-earnings ratio in situations where the company has poor earnings that are gradually increasing. That is, PREG is most useful when the raw data on earnings may not show the company's fundamental strength or potential profitability. It is used often for dot-coms and other companies that may have poor earnings in their first few years of operation.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved