PEG Ratio Calculator

Calculate the Price/Earnings to Growth ratio to determine if a stock is overvalued or undervalued relative to its earnings growth.

%

Quick Facts

Fair Value
PEG = 1.0
Stock fairly priced
Undervalued
PEG < 1.0
Potentially good buy
Overvalued
PEG > 1.0
May be overpriced
Typical Range
0.5 - 2.0
For growth stocks

Your Results

Calculated
PEG Ratio
0.00
Price/Earnings to Growth
P/E Ratio
0.00
Input value
Growth Rate
0%
Annual expected

Interpretation

The interpretation will appear here after calculation.

Key Takeaways

  • PEG ratio measures stock value relative to earnings growth
  • A PEG of 1.0 suggests fair valuation
  • PEG below 1.0 may indicate an undervalued stock
  • PEG above 1.0 may suggest overvaluation
  • Best used to compare stocks within the same industry

About the PEG Ratio Calculator

The PEG Ratio Calculator is a comprehensive online tool designed to help you calculate the Price/Earnings to Growth ratio for stock valuation. Whether you're a professional investor, student, or simply need quick calculations, this free calculator provides accurate results instantly.

Understanding the PEG Ratio Formula

PEG Ratio = P/E Ratio / Annual Growth Rate
P/E Ratio = Price per Share / Earnings per Share
Growth Rate = Expected annual earnings growth (%)

The PEG ratio takes the P/E ratio a step further by factoring in expected earnings growth. This helps investors understand whether a stock's price is justified by its growth prospects.

Interpreting PEG Ratio Values

< 1.0
Undervalued
Stock may be trading below its growth potential. Could be a buying opportunity.
= 1.0
Fair Value
Stock is fairly priced relative to its expected earnings growth rate.
> 1.0
Overvalued
Stock may be overpriced relative to its growth. Exercise caution.

How to Use This Calculator

  1. Enter the P/E ratio of the stock you want to analyze
  2. Enter the expected annual earnings growth rate (%)
  3. Click the "Calculate" button to see your results
  4. Use the "Reset" button to clear all fields and start over
  5. Copy the widget code or calculator link to share or embed on your website

Key Features

  • Free to use with no registration required
  • Mobile-friendly responsive design
  • Instant calculations with real-time results
  • Accurate formulas based on industry standards
  • Easy to embed on your website
  • No downloads or installations needed

Practical Applications

The PEG ratio is particularly useful for:

  • Comparing growth stocks: Helps level the playing field when comparing companies with different growth rates
  • Identifying value opportunities: Find stocks that may be undervalued relative to their growth
  • Portfolio screening: Filter stocks based on PEG ratio thresholds
  • Investment research: Add context to P/E ratio analysis

Limitations to Consider

While the PEG ratio is a valuable tool, keep these limitations in mind:

  • Relies on growth rate estimates which may not be accurate
  • Less useful for companies with negative earnings
  • Doesn't account for risk, debt, or cash flow
  • Best used alongside other valuation metrics

Frequently Asked Questions

Is this calculator free to use?

Yes, this calculator is completely free to use with no hidden charges or registration requirements.

How accurate are the results?

The calculator uses standard mathematical formulas and is highly accurate. However, always consult with a financial professional for critical investment decisions.

Can I use this calculator on my mobile device?

Absolutely! This calculator is fully responsive and works perfectly on smartphones, tablets, and desktop computers.

Can I embed this calculator on my website?

Yes! Click the "Copy Widget Code" button above to get the embed code for your website.

What is a good PEG ratio?

Generally, a PEG ratio below 1.0 is considered attractive, as it suggests the stock may be undervalued relative to its growth. However, what constitutes a "good" PEG ratio varies by industry and market conditions.

Additional Resources

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