Price to Earnings Growth

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Benzinga  Sep 1  Comment 
Below are the top apparel stores stocks on the NYSE in terms of PEG ratio. Christopher & Banks Corporation (NYSE: CBK) has a PEG ratio of 0.03. Christopher & Banks' trailing-twelve-month EPS is $1.13. Stage Stores Inc (NYSE: SSI) has a PEG...
The Economic Times  Sep 1  Comment 
Also, brokerages have slashed India's targets citing delay in earnings recovery while its GDP growth slowed by more than expected in the quarter to June.
Benzinga  Aug 31  Comment 
Below are the top waste management stocks on the NYSE in terms of PEG ratio. Waste Connections, Inc. (NYSE: WCN) has a PEG ratio of 3.17. Waste Connections' trailing-twelve-month revenue is $2.11 billion. Waste Management, Inc. (NYSE: WM)...
Financial Times  Aug 24  Comment 
Investors are buying insurance against breaking of currency peg
Benzinga  Aug 24  Comment 
Below are the top small-cap grocery stores stocks on the NYSE and the NASDAQ in terms of PEG ratio. The Fresh Market Inc (NASDAQ: TFM) has a PEG ratio of 1.20. Fresh Market's trailing-twelve-month EPS is $1.27. Ingles Markets, Incorporated ...
TheStreet.com  Jul 31  Comment 
NEW YORK (TheStreet) -- Public Service Enterprise Group  closed trading up 0.99% to $41.67 on Friday following the release of its second quarter earnings results before the opening bell today. The Newark, NJ-based energy holding company...
Financial Times  Jul 22  Comment 
Despite progress on reforms, intervention remains daily reality
Telecom Ramblings  Jul 21  Comment 
PEG Bandwidth has found an inorganic way to grow its network in the MidAtlantic. This morning they announced an asset acquisition, purchasing a 48-mile fiber network from W.L. Gore & Associates.  Gore & Associates, among other things, is the...
Benzinga  Jul 20  Comment 
Below are the top small-cap management services stocks on the NYSE and the NASDAQ in terms of PEG ratio. ICF International Inc (NASDAQ: ICFI) has a PEG ratio of 1.50. ICF International's trailing-twelve-month EPS is $1.93. The Hackett Group,...




 

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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