Price/Earnings To Growth (PEG Ratio)
A ratio used to determine a stock's value while taking into account earnings growth. The calculation is as follows:
Investopedia Says:
PEG is a widely used indicator of a stock's potential value. It is favored by many over the price/earnings ratio because it also accounts for growth. Similar to the P/E ratio, a lower PEG means that the stock is more undervalued.
Keep in mind that the numbers used are projected and, therefore, can be less accurate. Also, there are many variations using earnings from different time periods (i.e. one year vs five year). Be sure to know the exact definition your source is using. Related Terms:
Earnings Per Share - EPS
Growth At A Reasonable Price - GARP
Long-Term Growth
Multiple
Price Multiple
Price-Earnings Ratio - P/E Ratio
Price-To-Innovation-Adjusted Earnings
Price/Earnings To Growth And Dividend Yield - PEGY Ratio
Trailing Price-To-Earnings - Trailing P/E |