Price to Earnings Growth

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Benzinga  Apr 17  Comment 
Below are the top advertising agencies stocks on the NYSE and the NASDAQ in terms of PEG ratio. WPP plc (NASDAQ: WPPGY) has a PEG ratio of 1.49. WPP's trailing-twelve-month revenue is $18.44 billion. Omnicom Group (NYSE: OMC) has a PEG ratio...
Benzinga  Apr 16  Comment 
Below are the top mid-cap chemicals-major diversified stocks on the NYSE and the NASDAQ in terms of PEG ratio. Celanese (NYSE: CE) has a PEG ratio of 0.86. Celanese's trailing-twelve-month revenue is $6.51 million. Ashland (NYSE: ASH) has a...
Benzinga  Apr 15  Comment 
Below are the top application software stocks on the NASDAQ in terms of PEG ratio. Immersion (NASDAQ: IMMR) has a PEG ratio of 0.33. Immersion's trailing-twelve-month revenue is $47.50 million. Stamps.com (NASDAQ: STMP) has a PEG ratio of...
Benzinga  Apr 14  Comment 
Below are the top large-cap data storage devices stocks on the NYSE and the NASDAQ in terms of PEG ratio. Seagate Technology Public Limited Company (NASDAQ: STX) has a PEG ratio of 0.96. Seagate's trailing-twelve-month revenue is $13.97...
Benzinga  Apr 10  Comment 
Below are the top diversified electronics stocks on the NASDAQ in terms of PEG ratio. Silicon Motion Technology (NASDAQ: SIMO) has a PEG ratio of 0.32. Silicon Motion's trailing-twelve-month revenue is $225.30 million. Alliance Fiber Optic...
Benzinga  Apr 9  Comment 
D.A. Davidson believes Gigamon's (NYSE: GIMO) 36 percent drop on Tuesday is a buying opportunity. Analyst Mark Kelleher upgraded shares from Neutral to Buy and has a $22.50 price target after lowering the price target from $36 yesterday. The...
Benzinga  Apr 9  Comment 
Below are the top mid-cap diversified communication services stocks on the NASDAQ in terms of PEG ratio. Internet Gold Golden Lines (NASDAQ: IGLD) has a PEG ratio of 0.39. Internet Gold Golden Lines' trailing-twelve-month revenue is $2.76...
Times Online  Apr 9  Comment 
At this late stage in the former culture secretary’s political career, discussing Maria Miller’s ignorance of the arts seems rather...
Benzinga  Apr 8  Comment 
Below are the top mid-cap healthcare information services stocks on the NASDAQ in terms of PEG ratio. Computer Programs & Systems (NASDAQ: CPSI) has a PEG ratio of 1.92. Computer Programs & Systems' trailing-twelve-month revenue is $200.90...
Benzinga  Apr 7  Comment 
Below are the top mid-cap information technology services stocks on the NYSE and the NASDAQ in terms of PEG ratio. NCR (NYSE: NCR) has a PEG ratio of 0.89. NCR's trailing-twelve-month revenue is $6.12 billion. Computer Sciences (NYSE: CSC)...




 

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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