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PEG Ratio - Price/Earnings to Growth | Wanderings

What does PEG mean? A PEG ratio is used to determine a stock's value while taking into account earnings growth. The calculation is as follows:

PEG is a widely used indicator of a stock's potential value. It is favored by many over the price/earnings ratio because it also accounts for growth. Similar to the P/E ratio, a lower PEG means that the stock is more undervalued.

Keep in mind that the numbers used are projected numbers and, therefore, less accurate. Also, there are many variations using earnings from different time periods (i.e. one year vs five year). Be sure to know the exact definition your source is using.

Price/Earnings To Growth - PEG Ratio
Price/Earnings To Growth - PEG Ratio
PEG ratio - Wikipedia, the free encyclopedia
The Intelligent Investor
The Definitive Book on Value Investing
By Benjamin Graham

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