Price to Earnings Growth

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Benzinga  Jul 18  Comment 
Below are the top mid-cap restaurants stocks on the NYSE and the NASDAQ in terms of PEG ratio. Bloomin' Brands (NASDAQ: BLMN) has a PEG ratio of 0.84. Bloomin' Brands' trailing-twelve-month revenue is $4.19 billion. Brinker International...
Benzinga  Jul 17  Comment 
Below are the top large-cap semiconductor-specialized stocks on the NYSE and the NASDAQ in terms of PEG ratio. Linear Technology (NASDAQ: LLTC) has a PEG ratio of 2.38. Linear Technology's trailing-twelve-month revenue is $1.35 billion. Altera...
Benzinga  Jul 16  Comment 
Below are the top mid-cap staffing & outsourcing services stocks on the NYSE and the NASDAQ in terms of PEG ratio. 51job (NASDAQ: JOBS) has a PEG ratio of 1.25. 51job's trailing-twelve-month revenue is $268.10 million. Robert Half...
Benzinga  Jul 15  Comment 
Below are the top surety & title insurance stocks on the NYSE and the NASDAQ in terms of PEG ratio. Ambac Financial Group (NYSE: AMBC) has a PEG ratio of 0.05. Ambac Financial's trailing-twelve-month revenue is $1.10 billion. OneBeacon...
Benzinga  Jul 14  Comment 
Below are the top telecom services-foreign stocks on the NYSE in terms of PEG ratio. Orange (NYSE: ORAN) has a PEG ratio of 0.53. Orange's trailing-twelve-month operating margin is 15.60%. Nippon Telegraph and Telephone (NYSE: NTT) has a PEG...
Benzinga  Jul 11  Comment 
Below are the top aerospace/defense-major diversified stocks on the NYSE and the NASDAQ in terms of PEG ratio. GenCorp (NYSE: GY) has a PEG ratio of 0.45. GenCorp's trailing-twelve-month EPS is $2.09. Textron (NYSE: TXT) has a PEG ratio of...
DailyFinance  Jul 10  Comment 
American Water (NYSE: AWK), the largest publicly traded U.S. water and wastewater utility company, announced today it has been recognized as a Platinum-Level Fit-Friendly Worksite by the American Heart Association for helping ...
Benzinga  Jul 10  Comment 
Below are the top biotechnology stocks on the NASDAQ in terms of PEG ratio. Aratana Therapeutics (NASDAQ: PETX) has a PEG ratio of 0.30. Aratana Therapeutics' trailing-twelve-month revenue is $0.30 million. Enzymotec (NASDAQ: ENZY) has a PEG...
FX Street  Jul 9  Comment 
The Hong Kong Dollar (HKD) isn’t a currency we often talk about at FOREX.com as it is pegged to the... For more information, read our latest forex news and reports.
Benzinga  Jul 9  Comment 
Below are the top apparel stores stocks on the NASDAQ in terms of PEG ratio. Destination Maternity (NASDAQ: DEST) has a PEG ratio of 1.03. Destination Maternity's trailing-twelve-month revenue is $531.00 million. Francesca's Holdings (NASDAQ:...




 

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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