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Low PE Growth Stocks

This page lists companies that have unusually low price-to-earnings growth ratios (PEG ratios). The PEG ratio is a valuation metric for determining the relative trade-off between a stock's price, its earnings per share (EPS) and its expected earnings growth. It is calculated by dividing a stock's P/E ratio by the earnings growth rate. PEG ratios are particularly useful in comparing the valuation of two stocks that have significantly different earnings growth rates. How to interpret PEG (price-to-earnings growth) ratios.

Exchange(s):
Market Cap:
CompanyPE RatioPEG RatioMarket CapCurrent PricePrice ChangeVolumeAverage VolumeIndicator(s)
IMPALA PLATINUM/S logo
IMPUY
IMPALA PLATINUM/S
32.710.11$7.77 billion$9.49-2.4%99,711100,946Heavy News Reporting
Nomura logo
NMR
Nomura
5.570.12$15.21 billion$4.90-0.8%2,196149,676Analyst Upgrade
Increase in Short Interest
Heavy News Reporting
Encore Capital Group logo
ECPG
Encore Capital Group
6.850.13$1.41 billion$43.75-5.4%27,599283,267Earnings Announcement
Unusual Options Activity
Analyst Revision
Heavy News Reporting
NRG Energy logo
NRG
NRG Energy
2.200.15$8.36 billion$34.18+0.6%76,8122.32 millionEarnings Announcement
Analyst Downgrade
Increase in Short Interest
Heavy News Reporting
RTLR
Rattler Midstream
9.190.21$1.19 billion$7.90-2.1%9,437413,080Earnings Announcement
Analyst Report
Decrease in Short Interest
Turkcell Iletisim Hizmetleri A.S. logo
TKC
Turkcell Iletisim Hizmetleri A.S.
11.560.22$4.47 billion$5.20flat59,863551,549Upcoming Earnings
Heavy News Reporting
Victory Capital logo
VCTR
Victory Capital
10.230.28$1.28 billion$18.73+2.7%3,669106,346Earnings Announcement
Dividend Increase
Analyst Report
Heavy News Reporting
Harmony Gold Mining logo
HMY
Harmony Gold Mining
45.290.30$3.41 billion$6.34-5.2%304,72012.39 million
Canadian Solar logo
CSIQ
Canadian Solar
5.050.32$1.50 billion$25.05+6.1%144,7281.13 millionEarnings Announcement
Analyst Report
High Trading Volume
Unusual Options Activity
Heavy News Reporting
Newmark Group logo
NMRK
Newmark Group
8.090.34$774.41 million$4.37+5.0%25,6171.04 millionEarnings Announcement
Decrease in Short Interest
Heavy News Reporting
Qurate Retail Inc Series A logo
QRTEA
Qurate Retail Inc Series A
-8.970.35$4.80 billion$11.48+1.4%123,6132.92 millionUpcoming Earnings
Analyst Downgrade
JinkoSolar logo
JKS
JinkoSolar
10.050.35$986.70 million$21.81+4.1%51,3781.45 millionDecrease in Short Interest
Unum Group logo
UNM
Unum Group
3.800.39$3.61 billion$17.84+3.9%69,3802.59 millionDecrease in Short Interest
Vistra Energy logo
VST
Vistra Energy
16.150.40$9.26 billion$18.89+0.3%125,6513.44 millionAnalyst Downgrade
Decrease in Short Interest
Analyst Revision
H & R Block logo
HRB
H & R Block
1,533.530.44$2.94 billion$15.32+3.5%165,3323.50 million
Laureate Education logo
LAUR
Laureate Education
3.360.50$2.63 billion$12.75+0.2%17,9091.21 millionEarnings Announcement
Analyst Report
Increase in Short Interest
Affiliated Managers Group logo
AMG
Affiliated Managers Group
28.840.50$3.32 billion$71.82+2.7%5,685374,215Increase in Short Interest
Celgene logo
CELG
Celgene
14.220.51$77.04 billion$108.24flat114,3026.77 million
The GEO Group logo
GEO
The GEO Group
8.400.51$1.31 billion$10.67-0.1%49,3672.09 millionDecrease in Short Interest
Heavy News Reporting
The Western Union logo
WU
The Western Union
15.840.52$9.44 billion$22.97+0.9%163,7836.13 millionEarnings Announcement
Analyst Report
Analyst Revision
Heavy News Reporting
American Campus Communities logo
ACC
American Campus Communities
43.590.52$4.75 billion$34.87-0.5%27,5481.00 million
VEON logo
VEON
VEON
11.110.55$2.73 billion$1.56-1.0%12,4713.78 millionAnalyst Downgrade
Decrease in Short Interest
Graphic Packaging logo
GPK
Graphic Packaging
33.590.55$4.03 billion$14.78+2.4%84,9143.19 millionDecrease in Short Interest
Discovery Communications logo
DISCA
Discovery Communications
10.650.57$11.04 billion$20.99-3.0%414,9293.89 millionEarnings Announcement
Analyst Report
ASE Technology logo
ASX
ASE Technology
13.110.58$10.27 billion$4.72-1.5%6,6181.10 millionAnalyst Downgrade
Daqo New Energy logo
DQ
Daqo New Energy
31.520.58$1.70 billion$121.97+2.6%5,288310,549Upcoming Earnings
Gray Television logo
GTN
Gray Television
7.370.59$1.45 billion$14.59-1.3%19,272664,689Earnings Announcement
Heavy News Reporting
Meritage Homes logo
MTH
Meritage Homes
11.410.60$3.77 billion$98.71-1.9%9,863508,034Insider Selling
Telenor ASA logo
TELNY
Telenor ASA
34.580.62$23.59 billion$15.91-0.8%25,89635,112Analyst Report
Heavy News Reporting
PRDO
Perdoceo Education
14.360.63$1.02 billion$14.80+4.2%428,073682,681Earnings Announcement
Unusual Options Activity
Heavy News Reporting
Nexstar Media Group logo
NXST
Nexstar Media Group
11.540.64$3.91 billion$88.39-1.0%9,102344,964Earnings Announcement
Analyst Report
Unusual Options Activity
Heavy News Reporting
KT logo
KT
KT
9.340.65$4.89 billion$9.99+1.2%42,486622,552
Encana logo
ECA
Encana
9.040.66$14.45 billion$11.12+0.5%2.38 million21.04 millionHeavy News Reporting
VIAC
ViacomCBS
10.570.68$15.86 billion$25.78-4.1%367,3809.02 millionEarnings Announcement
Dividend Announcement
Analyst Report
Heavy News Reporting
Lenovo Group logo
LNVGY
Lenovo Group
11.630.68$7.54 billion$12.33-1.8%30,32742,687Upcoming Earnings
Wintrust Financial logo
WTFC
Wintrust Financial
9.690.69$2.47 billion$43.68+2.9%7,137317,508Analyst Report
Hitachi logo
HTHIY
Hitachi
37.760.69$30.92 billion$64.20+0.4%18,99137,803
Ricoh logo
RICOY
Ricoh
87.440.71$4.83 billion$7.00+4.9%267685Earnings Announcement
NetEase logo
NTES
NetEase
19.140.72$60.38 billion$465.40-3.4%25,848720,928Upcoming Earnings
Analyst Upgrade
BP Midstream Partners logo
BPMP
BP Midstream Partners
6.790.72$1.15 billion$11.00-3.8%3,663150,640Increase in Short Interest
Heavy News Reporting
TEGNA logo
TGNA
TEGNA
8.680.72$2.58 billion$11.80+0.8%51,8151.73 millionUpcoming Earnings
Analyst Downgrade
Heavy News Reporting
Teekay Tankers logo
TNK
Teekay Tankers
3.790.72$516.19 million$15.36+1.1%9,000803,400Upcoming Earnings
Heavy News Reporting
Barclays logo
BCS
Barclays
17.190.73$23.84 billion$5.50-0.7%261,3023.41 millionAnalyst Upgrade
Gold Fields logo
GFI
Gold Fields
31.050.73$11.50 billion$13.04-6.3%348,24110.51 million
Alexion Pharmaceuticals logo
ALXN
Alexion Pharmaceuticals
27.580.76$22.62 billion$103.14-0.7%39,4451.63 millionDecrease in Short Interest
Carbonite logo
CARB
Carbonite
18.380.78$804.53 million$22.98flat400798,577
Biogen logo
BIIB
Biogen
8.800.78$47.63 billion$300.31+8.2%182,8131.05 millionAnalyst Report
High Trading Volume
Decrease in Short Interest
Manulife Financial logo
MFC
Manulife Financial
8.310.78$28.24 billion$14.62+0.2%195,3872.22 millionAnalyst Report
Decrease in Short Interest
Heavy News Reporting
AngloGold Ashanti logo
AU
AngloGold Ashanti
33.980.78$12.68 billion$30.92-2.3%149,4773.76 million
Diamondback Energy logo
FANG
Diamondback Energy
-2.360.79$6.34 billion$41.69+2.4%47,9632.19 millionEarnings Announcement
Dividend Announcement
Analyst Report
Analyst Revision
Telefonaktiebolaget LM Ericsson logo
ERIC
Telefonaktiebolaget LM Ericsson
128.670.80$38.72 billion$11.58-1.1%499,45813.00 million
Viacom logo
VIAB
Viacom
5.970.82$9.77 billion$24.22flat41.87 million5.05 million
Triton International logo
TRTN
Triton International
7.990.82$2.20 billion$32.28+0.2%13,123649,386Decrease in Short Interest
58.com logo
WUBA
58.com
6.330.82$8.27 billion$55.65+0.3%201,3871.76 million
Whirlpool logo
WHR
Whirlpool
13.140.83$10.67 billion$171.45-0.3%12,003891,831Analyst Report
Heavy News Reporting
Anthem logo
ANTM
Anthem
11.960.84$69.53 billion$275.31+1.4%50,1201.26 million
Companhia Brasileira de Distribuicao logo
CBD
Companhia Brasileira de Distribuicao
28.300.85$3.44 billion$12.45-1.3%18,111417,657
Cigna logo
CI
Cigna
12.600.85$65.39 billion$177.07+2.3%66,3212.01 millionDecrease in Short Interest
OSI Systems logo
OSIS
OSI Systems
18.630.86$1.36 billion$77.70+4.7%5,303155,859Increase in Short Interest
Heavy News Reporting
Mercury General logo
MCY
Mercury General
13.200.87$2.49 billion$45.26+1.8%5,497265,176Earnings Announcement
Dividend Announcement
Analyst Upgrade
Decrease in Short Interest
Dell logo
DELL
Dell
9.690.87$44.71 billion$60.30-1.1%29,7813.21 millionAnalyst Downgrade
Honda Motor logo
HMC
Honda Motor
23.360.88$42.44 billion$24.53-2.8%31,693629,653Earnings Announcement
Analyst Downgrade
Decrease in Short Interest
Heavy News Reporting
Teva Pharmaceutical Industries logo
TEVA
Teva Pharmaceutical Industries
5.120.90$12.96 billion$11.83-2.6%164,1118.46 millionEarnings Announcement
Analyst Upgrade
Ingles Markets logo
IMKTA
Ingles Markets
8.460.91$865.51 million$42.83+5.4%4,539103,014Heavy News Reporting
RenaissanceRe logo
RNR
RenaissanceRe
15.180.91$9.58 billion$187.31+1.5%5,863317,049Dividend Announcement
Centene logo
CNC
Centene
22.500.93$37.16 billion$64.13+0.6%72,0273.14 million
Momo logo
MOMO
Momo
9.460.94$4.09 billion$19.58-4.4%208,5963.06 millionAnalyst Upgrade
FHI
Federated Hermes
8.780.94$2.58 billion$26.00+1.9%14,342705,573Analyst Report
SEASPAN CORP/SH SH logo
SSW
SEASPAN CORP/SH SH
5.800.95$2.14 billion$9.91flat1.39 million756,576
Quest Diagnostics logo
DGX
Quest Diagnostics
22.670.95$16.78 billion$124.91+0.3%26,4961.43 millionDecrease in Short Interest
United Rentals logo
URI
United Rentals
11.650.95$12.42 billion$172.72+2.4%29,448914,079Analyst Revision
D. R. Horton logo
DHI
D. R. Horton
12.210.96$24.56 billion$67.52-0.1%50,8313.81 millionIncrease in Short Interest
Analyst Revision
Adtalem Global Education logo
ATGE
Adtalem Global Education
8.870.97$1.86 billion$35.94+0.4%18,788430,612
East West Bancorp logo
EWBC
East West Bancorp
8.830.99$5.19 billion$36.75+2.8%18,864840,850Analyst Report
Decrease in Short Interest
GRIFOLS S A/S logo
GRFS
GRIFOLS S A/S
20.260.99$12.59 billion$18.23-1.4%17,696971,179Analyst Downgrade
Morgan Stanley logo
MS
Morgan Stanley
9.061.00$79.07 billion$50.21+1.5%247,43911.90 million
Qiagen logo
QGEN
Qiagen
1,570.671.01$10.72 billion$47.12+0.5%38,6971.78 millionEarnings Announcement
Increase in Short Interest
CyrusOne logo
CONE
CyrusOne
498.261.02$9.90 billion$84.70+0.7%235,864899,631Analyst Report
Insider Selling
Tempur Sealy International logo
TPX
Tempur Sealy International
23.341.02$4.45 billion$86.34+0.1%10,993678,206
SCPL
SciPlay
20.281.03$1.94 billion$15.01-2.6%18,642716,344
Big Lots logo
BIG
Big Lots
6.401.03$1.77 billion$45.17+0.8%31,7501.31 millionDecrease in Short Interest
Atlantica Yield logo
AY
Atlantica Yield
187.261.04$3.05 billion$29.96+0.1%10,965514,346Earnings Announcement
Dividend Increase
Analyst Report
Analyst Revision
Heavy News Reporting
Sanmina logo
SANM
Sanmina
19.811.04$2.03 billion$29.92-0.1%10,086406,687Analyst Upgrade
Decrease in Short Interest
Quanta Services logo
PWR
Quanta Services
21.121.04$6.27 billion$45.84+0.9%63,928901,148Earnings Announcement
Analyst Report
Decrease in Short Interest
Heavy News Reporting
Akzo Nobel logo
AKZOY
Akzo Nobel
35.191.04$19.18 billion$32.02+0.2%31,20123,518
MITSY
Mitsui & Co Ltd
9.051.06$27.25 billion$319.97+2.0%5511,656
Greif logo
GEF
Greif
13.311.07$1.80 billion$38.48+3.3%4,924156,198
Mobil'nye Telesistemy PAO logo
MBT
Mobil'nye Telesistemy PAO
9.461.08$8.37 billion$8.89-1.2%64,6902.90 millionDecrease in Short Interest
Steel Dynamics logo
STLD
Steel Dynamics
11.371.09$5.79 billion$28.31+1.1%26,4201.66 millionIncrease in Short Interest
Charter Communications logo
CHTR
Charter Communications
57.091.09$142.79 billion$600.06-0.3%22,314837,068Earnings Announcement
Analyst Report
Insider Selling
Increase in Short Interest
Baozun logo
BZUN
Baozun
68.381.10$2.52 billion$41.03-2.3%13,436919,214Analyst Upgrade
Weight Watchers International logo
WW
Weight Watchers International
20.821.10$1.70 billion$25.19-0.1%31,9891.14 millionEarnings Announcement
Analyst Report
Unusual Options Activity
Analyst Revision
Heavy News Reporting
Invesco logo
IVZ
Invesco
10.471.10$4.71 billion$10.68+3.5%140,5785.61 millionAnalyst Revision
Prosperity Bancshares logo
PB
Prosperity Bancshares
11.591.10$5.36 billion$57.93+2.9%8,998564,132Analyst Report
WPX Energy logo
WPX
WPX Energy
-3.821.12$3.39 billion$6.03-0.7%207,56810.00 millionDecrease in Short Interest
Signature Bank logo
SBNY
Signature Bank
11.211.13$5.53 billion$107.85+4.5%7,448393,539Increase in Short Interest
Analyst Revision
Select Medical logo
SEM
Select Medical
16.381.13$2.74 billion$20.64+2.2%29,250764,704Analyst Report
KB Financial Group logo
KB
KB Financial Group
4.501.13$12.61 billion$30.41-1.0%1,992172,386Analyst Downgrade
Increase in Short Interest
HCA Healthcare logo
HCA
HCA Healthcare
13.341.13$43.70 billion$129.40-2.2%28,6212.47 million
Strategic Education logo
STRA
Strategic Education
23.301.14$2.71 billion$120.91+0.4%13,646180,469Analyst Downgrade
Heavy News Reporting
Last Updated: Friday, 02:12 PM ET. Prices are 15-minutes delayed.

Summary - Fundamental analysis is an important part of any investment strategy. Investors have many tools that can help them determine if a company is appropriately valued such as a balance sheet. When investing in stocks, one of the key ratios that is used is the price-to-earnings (P/E) ratio. In simple terms, this tells an investor how much they are paying to purchase $1 or a company’s earnings.

However, while the P/E ratio can show a company as a good investment, it doesn’t take into account future earnings. This is why many investors have come to supplement the P/E ratio with another measurement tool the price-to-earnings growth (or PEG) ratio. This ratio takes into account a company’s future earnings growth to give a more accurate picture of a stock’s valuation.

PEG is particularly important for certain growth stocks that may historically have periods of higher and lower growth when compared to the overall stock market. These stocks may have a forecasted EPS growth rate that supports a P/E ratio that would make a stock seem overvalued. Likewise, a PEG ratio for a mature company may show that what many investors consider to be a fair P/E ratio is actually indicative of a stock that is overvalued.

However, like other ratios, the PEG ratio is most helpful when comparing a stock price to others in its industry or sector. Some sectors, such as technology, may have much higher future earnings growth. However, the accepted rule among investors is that a PEG of greater than 1 is considered to indicate a stock price that is too high based on expected earnings growth. A PEG of less than 1 is considered to indicate a stock that is undervalued based on projected earnings growth.

Introduction

Legendary investment manager Peter Lynch once wrote: "The P/E ratio of any company that's fairly priced will equal its growth rate". Certainly, a stock's price-to-earnings ratio (P/E ratio) is widely considered a reasonably accurate measure of a company's valuation, and can sometimes be used as a way of comparing one company against another.

The P/E ratio is a measurement of how much an investor is paying to buy $1 of a company’s earnings or profit. To calculate the P/E Ratio you simply divide the stock price by the earning per share:

P/E Ratio = Stock Price/Earnings per share (EPS)

For example, if a company is reporting earnings of $3 per share and their stock is selling for $30 per share, the P/E ratio is 10 ($30 per share/$3 per share).

While there is no “standard” P/E Ratio for all stocks and sectors, investors can generally find that different industries will have a P/E ratio that is considered normal. For example, it’s not uncommon to find technology companies with a P/E ratio of 20 or higher. This is due in part because these companies include many growth stocks that are anticipated to increase in share price and EPS. Financial services companies might have P/E ratios in the low teens. For investors this means rather than one-size-fits-all, the objective is to ensure that two companies in the same industry have a similar P/E ratio. However, if all companies in a particular sector begin to have P/E ratios that are abnormally high or low (based on their historical pattern) it may indicate that the stock is overvalued or undervalued. For example, in the months leading up to the real estate crash of 2007, the P/E ratio of real estate stocks soared. A similar phenomenon occurred before the tech stock crash in the early 2000s.

However, like many ratios, the P/E ratio has limitations. The primary limitation of P/E ratio is that it is limited to a moment in time. It gives you an accurate assessment of where one company compares to another at that moment. However, to get a more accurate view of whether a stock is overvalued or undervalued requires knowledge of the anticipated growth rate between the two companies. For example, a company with a P/E of 30 with an anticipated growth rate of 50% may be much more undervalued than a company with a more enticing P/E of 20, but with an anticipated growth rate of 5%, which is fairly typical of a mature company.

Because of the limitations of the P/E ratio, investors will frequently use a ratio that factors in a company’s projected or historical growth rate to get a more accurate picture of a stock’s valuation. This number is known as the PEG ratio and it is the focus of this article. In this article we’ll define the PEG ratio and provide examples, we’ll also review how to interpret the PEG ratio and review some of the limitations of this ratio.

What is the price-to-earnings growth (PEG) ratio?

This limitation spawned the need for a new metric, the ration of the P/E to growth (or PEG). The formula for PEG is as follows:

P/E Ratio/Earnings per share (EPS) growth Rate

If you were to put this formula into a sentence, it would say that the PEG ratio is a calculation that helps investors determine whether a stock's price is overvalued or undervalued by not only looking at their current earnings but also looking at their expected future earnings growth.

To test Lynch’s theory, PEG would imply that if a company had a “Fair P/E ratio” than it should have a PEG of around 1.

If:         Fair P/E Ratio = EPS Growth Rate

Than:    P/E Ratio/EPS Growth Rate = 1

How to interpret the PEG ratio

If the PEG ratio is greater than 1, the implication is that the stock is more expensive (in relative terms). A PEG ratio below 1 means that a stock is trading at below its fair value.

While it’s true that the P/E ratio is a multiple and the PEG is a percent, it’s important to focus on the true objective and that is to determine whether a stock is properly valued. To that end, the PEG is considered to be more accurate than simply looking at a company’s P/E ratio when determining proper valuation.

For example, by definition, a high P/E ratio typically signals to investors that a stock is overvalued. However, if the company has high growth estimates than calculating the PEG can show a very different picture and one that could suggest the stock is still a buy. In our earlier example, a company with a P/E ratio of 30 might be considered to be overbought, but if it is forecasting a growth rate of 50% than its PEG ratio suggests. Using the formula:

PEG = P/E Ratio/Growth Rate, the company would have a PEG ratio of 0.6

PEG = 30/50 = 0.6

In this case, the PEG number suggests that either analysts are setting their expectations too low or that the stock’s growth is being undervalued. In either case, the ratio suggests the stock has room to grow.

The opposite is also true. If a company has a P/E range of 8 which may be lower than expected or lower than others in its sector, the assumption could be that the stock is undervalued. However, a closer look may indicate that the company is expecting only about 5% for the growth for the year. While that growth rate is certainly not poor when you perform the PEG calculation you come up with:

PEG = 8/5 = 1.6

In this case, the company may very well have a difficult time increasing their share price above its current level.

Limitations of the P/E Growth ratio

One of the basic limitations of PEG is that it does not forecast growth beyond the period being measured. If a company has a stellar PEG number, it says nothing about the company’s future growth prospects. It also does not provide a context for the growth number. For example, that growth could be due to a one-time event. Also, when compared with other analysis tools such as a discounted cash flow analysis, the PEG ration tends to undervalue the companies with the highest growth rates. Another limitation of the PEG ratio is how future growth is calculated. If the company uses projected growth, it may significantly different (and easier to manipulate) than if they were to use historical data.

However, these limitations make the PEG ratio no different than other ratios or metrics. Every investor needs to use more than one measurement tool to get a complete picture of a stock’s valuation. For example, looking at a company’s balance sheet over the course of several quarters can give investors a better look at trends having to do with their revenue growth or free cash flow.

The final word on the P/E growth ratio

The P/E growth ratio (or PEG) was developed and is used as a refinement of the standard P/E ratio that is used in fundamental analysis. The PEG ratio factors in a company’s forecasted growth potential either using historical data (meaning it's backward-looking) or using projected growth numbers (forward-looking). The formula for the PEG ratio is as follows:

PEG Ratio = P/E Ratio/Growth rate

Just like a P/E ratio, there is no "standard" for what constitutes a good PEG ratio. Some industries will have a "typical" PEG ratio that would seem high or low for another sector. In general, however, a P/E ratio that is around 1 is said to indicate a fair valuation for a stock. So for example, a stock that has a P/E ratio of 20 with a forecasted growth rate 20 percent would have a PEG ratio of 1.

A PEG ratio above 1 will typically indicate an overvalued stock and a PEG ratio of less than 1 will typically be an indication that a stock is undervalued.

Like any fundamental analysis ratio, the PEG has limitations, the largest being that it is only predictive of the time period being measured. For example, a company may be projecting 20% growth for the following year, but even if it achieves that growth there is no indication that it will continue to grow at that pace, nor does the PEG ratio provide a context for the growth figure. Also, the growth projections used for the PEG ratio can be determined using past growth data. While accurate in the sense that it is based on an actual, not projected, a number it can be higher or lower than the rate of growth the company is currently experiencing. Despite these limitations, the PEG ratio is still considered to be a good baseline test of valuation.


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