Also called price/earnings to growth
PEG
A P/E adjusted for how fast the company is growing. Around 1.0 is conventionally treated as fair, though the convention has little theory behind it.
How it is calculated
PEG = forward P/E ÷ growth
A fuller explanation of this one is still being written. The definition above is the short answer.
See also
- Forward P/E — The same ratio against next year's expected earnings, so it depends on a forecast rather than a fact.
- Growth rate — Year-one growth, faded toward the perpetual rate across the horizon. Left blank it comes from the company's own history, capped at the sector ceiling, and a genuine decline is kept rather than floored up.
Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.
