Price to Earnings Growth

RECENT NEWS
Benzinga  Oct 22  Comment 
Below are the top food wholesale stocks on the NASDAQ in terms of PEG ratio. The Chefs' Warehouse (NASDAQ: CHEF) has a PEG ratio of 1.49. Chefs' Warehouse trailing-twelve-month ROE is 10.40%. United Natural Foods (NASDAQ: UNFI) has a PEG ratio...
Benzinga  Oct 21  Comment 
Below are the top electronics wholesale stocks on the NYSE and the NASDAQ in terms of PEG ratio. Avnet (NYSE: AVT) has a PEG ratio of 0.84. Avnet's trailing-twelve-month ROE is 11.60%. Arrow Electronics (NYSE: ARW) has a PEG ratio of 1.05....
Benzinga  Oct 20  Comment 
Below are the top education & training services stocks on the NASDAQ in terms of PEG ratio. American Public Education (NASDAQ: APEI) has a PEG ratio of 0.80. American Public Education's trailing-twelve-month ROE is 19.20%. National American...
Benzinga  Oct 17  Comment 
Below are the top small-cap wireless communications stocks on the NYSE and the NASDAQ in terms of PEG ratio. Inteliquent (NASDAQ: IQNT) has a PEG ratio of 0.75. Inteliquent's trailing-twelve-month revenue is $210.00 million. Portugal Telecom,...
Benzinga  Oct 16  Comment 
Below are the top small-cap trucking stocks on the NYSE and the NASDAQ in terms of PEG ratio. ArcBest (NASDAQ: ARCB) has a PEG ratio of 0.32. ArcBest's trailing-twelve-month revenue is $2.44 billion. Celadon Group (NYSE: CGI) has a PEG ratio...
Benzinga  Oct 15  Comment 
Below are the top small-cap textile industrial stocks on the NYSE and the NASDAQ in terms of PEG ratio. Interface (NASDAQ: TILE) has a PEG ratio of 0.77. Interface's trailing-twelve-month revenue is $985.80 million. Unifi (NYSE: UFI) has a PEG...
SeekingAlpha  Oct 14  Comment 
By Diamond Technology Management: Situation: GoPro (NASDAQ:GPRO) recently went public at $24 per share. Since its IPO, the stock has skyrocketed closing at $76.67 on 10/13/14. The question is with this huge rise in the share price, is there skill...
Benzinga  Oct 14  Comment 
Below are the top technical services stocks on the NYSE in terms of PEG ratio. URS (NYSE: URS) has a PEG ratio of 1.16. URS' trailing-twelve-month revenue is $10.49 billion. AECOM Technology (NYSE: ACM) has a PEG ratio of 1.42. AECOM...
Benzinga  Oct 13  Comment 
Below are the top sporting activities stocks on the NYSE in terms of PEG ratio. Life Time Fitness (NYSE: LTM) has a PEG ratio of 1.22. Life Time Fitness' trailing-twelve-month revenue is $1.25 billion. SeaWorld Entertainment (NYSE: SEAS) has a...
Telecom Ramblings  Oct 6  Comment 
Lots of network news this Monday morning, here's a quick survey of some interesting items: PEG Bandwidth has expanded its product set to include wavelengths. They're offering 2.5G, 10G, and 100G not just in the main cities, but in the rural...




 

This article is about the financial metric Price/Earnings To Growth. For the article on the company with ticker PEG, see Public Service Enterprise Group (PEG).

The PEG ratio equals the P/E Ratio divided by projected annual earnings-per-share growth

The PEG ratio (alternately PE/G, P/E to G, Price/Earnings to Growth, or Price to Earnings to Growth) is a valuation metric comparing the Price to Earnings ratio of a company to its projected annual Earnings Per Share growth.

A PEG ratio below 1 would indicate a company is undervalued relative to its share price, while a PEG greater than 1 would indicate an overpriced stock, as a high P/E should generally correlate with a market expectation of greater forthcoming earnings.

However, as PEG relies on projected EPS growth, its usefulness is tied directly to the accuracy of such projections.

It must be noted that PEG is only a rule of thumb and has no underlying mathematical basis for gauging what a company's share price truly "should" be. The ratio has been criticized for penalizing value stocks, which have lower earnings growth.

Examples

  • Company XYZ is trading at $20/share with an EPS of $1.00 for a P/E of 20. Analysts predict a 50% annual earnings increase over the next five years. The PEG ratio of XYZ is therefore .40, indicating the stock is undervalued by the market assuming the earnings projection is accurate.
  • Company ABC is trading at $50/share with an EPS of $1.00 for a P/E of 50. Analysts predict a 50% annual earnings increase over the next five years. The PEG ratio of ABC is therefore 1.00, indicating the stock is valued properly by the market assuming the earnings projection is accurate.
  • Company LMN is trading at $10/share with an EPS of $1.00 for a P/E of 10. Analysts predict a 5% annual earnings increase over the next five years. The PEG ratio of LMN is therefore 2.00, indicating the stock is overvalued by the market assuming the earnings projection is accurate.
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