Fundamentals

PEG Ratio

The PEG (Price/Earnings to Growth) ratio adjusts the P/E ratio for a company's expected earnings growth rate. A PEG of 1.0 is often considered fair value; below 1.0 may indicate undervaluation relative to growth, while above 2.0 suggests expensive pricing.

Formula

PEG = P/E Ratio / EPS Growth Rate (%)

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This term is covered in the following lessons: