What is a Good PEG Ratio? Simple PEG Ratio Calculation Example PEG Ratio Calculator – Excel Template Price/Earnings-to-Growth Ratio Calculation Analysis How to Calculate PEG Ratio? The price/earnings-to-growth ratio, or “PEG ratio”, addresses one of the primary weaknesses of the price-to-...
What is a good PEG ratio? The ratio equal to 1 is considered a good one as it indicates the stocks of a company are fairly priced. Even if the ratio is slightly lower than 1, investors still prefer it. On the other hand, overvalued stocks are refrained from being invested, given the...
To calculate the much more useful PEG ratio, simply divide the PE ratio by the company's earnings growth rate. By using Microsoft's EPS growth rate in the last quarter,which was about 20%, you can find the PEG ratio like so: ($371.17 / $10.33) / 20 = 1.79 What is a good PEG r...
What Is Considered to Be a Good PEG Ratio? In general,a good PEG ratiohas a value lower than 1.0. PEG ratios greater than 1.0 are generally considered unfavorable, suggesting a stock is overvalued. Meanwhile, PEG ratios lower than 1.0 are considered better, indicating a stock is relatively ...
So why not use the PEG ratio to evaluate potential investments and uncover opportunities for future growth? Definition - What is PEG Ratio of a Stock? The price earnings to growth ratio, also known as the PEG ratio, is a valuable tool that takes the price earnings ratio one step further ...
What Does the PEG Ratio Tell You About a Stock? Typically, having a lower P/E ratio can indicate that a stock would be a good purchase. Yet, when you factor in the company’s growth rate it can tell a different story. When the PEG ratio is lower, it likely indicates that the stock...
The PEG ratio is often compared with theprice-earnings ratio, another valuation metric, since it's a component of the PEG's formula. While there are advantages to using PEG over P/E, investors should also be aware of the PEG ratio's limitations. ...
In brief, if a stock has a PEG ratio of 1, you conclude that investors are paying what the stock is worth based on its P/E and growth potential. If it is higher than 1 -- say 1.55 -- you conclude that investors are paying more than the growth projection justifies. If it is less...
PEG Ratio vs. P/E Ratio The price-to-earnings (P/E) ratio gives analysts a good fundamental indication of what investors are currently paying for a stock in relation to thecompany's earnings. One weakness of the P/E ratio, however, is that its calculation does not take into account t...
What Does a Negative PEG Ratio Indicate? A negative PEG can result from either negative earnings (losses), or a negative estimated growth rate. Either case suggests that a company may be in trouble. The Bottom Line While the P/E ratio is more commonly used by investors, the PEG ratio imp...