Price to Earnings Growth

RECENT NEWS
Benzinga  Sep 26  Comment 
Below are the top small-cap drug manufacturers-other stocks on the NYSE and the NASDAQ in terms of PEG ratio. DepoMed (NASDAQ: DEPO) has a PEG ratio of 0.37. DepoMed's trailing-twelve-month revenue is $222.30 million. SciClone Pharmaceuticals...
Benzinga  Sep 25  Comment 
Below are the top gaming activities stocks on the NYSE and the NASDAQ in terms of PEG ratio. King Digital Entertainment plc (NYSE: KING) has a PEG ratio of 1.14. King Digital's trailing-twelve-month revenue is $2.28 billion. Multimedia Games...
The Economic Times  Sep 24  Comment 
German business sentiment dropped for a fifth straight month in September to its lowest level since April 2013.
Benzinga  Sep 24  Comment 
Below are the top agricultural chemicals stocks on the NYSE in terms of PEG ratio. China Green Agriculture (NYSE: CGA) has a PEG ratio of 0.22. China Green Agriculture's trailing-twelve-month revenue is $233.40 million. CF Industries Holdings...
Benzinga  Sep 23  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 1.42. Chefs' Warehouse trailing-twelve-month revenue is $764.30 million. United Natural Foods (NASDAQ: UNFI)...
The Economic Times  Sep 22  Comment 
Auto analysts are shifting to the price-earnings growth (PEG) method from the conventional P/E valuation method.
TheStreet.com  Sep 22  Comment 
NEW YORK (TheStreet) --aPublic Service Enterprise Group Inc. was downgraded to "hold" from "buy" at Jefferies Group on Monday. The firm said it lowered its rating on the energy company as it feels "the western portion of [the Eastern grid...
Benzinga  Sep 22  Comment 
Below are the top asset management stocks on the NASDAQ in terms of PEG ratio. CIFC (NASDAQ: CIFC) has a PEG ratio of 0.61. CIFC's trailing-twelve-month revenue is $6.90 million. Encore Capital Group (NASDAQ: ECPG) has a PEG ratio of 0.91....
The Australian  Sep 16  Comment 
THE firm backed by James Packer, Paul Bassat and the Liberman family plans to invest up to $100 million a year.
Benzinga  Sep 16  Comment 
Below are the top stocks in the utilities sector in terms of PEG ratio. Huaneng Power International (NYSE: HNP) has a PEG ratio of 0.47. Huaneng Power's trailing-twelve-month revenue is $21.74 billion. Enersis SA (NYSE: ENI) has a PEG ratio of...




 

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.
Please install Flash Player to view this chart.
Please install Flash Player to view this chart.
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki