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The 'PEG ratio' (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share , and the company's expected growth.
Since 2016, the stock has traded at an average price-to-earnings ratio of 32.8, well below today's level. The PEG ratio is a great metric to compare a stock's valuation to its growth rate. S&P ...
Going by the fundamentals of value investing, while picking undervalued stocks, investors need to focus on their earnings growth potential. 5 Value Stocks With Impressive PEG Ratio Skip to main ...
Stock B is trading at a forward P/E of 30 and expected to grow at 25%. The PEG ratio for Stock A is 75% (15/20) and for Stock B is 120% (30/25). According to the PEG ratio, Stock A is a better purchase because it has a lower PEG ratio, or in other words, its future earnings growth can be purchased for a lower relative price than that of Stock B.
While P/E alone fails to identify a true value stock, PEG helps to find the intrinsic value of a stock.
The price/earnings-to-growth (PEG) ratio is slightly higher (at 2.8) than I generally like to pay for high-quality stocks. Plus, the stock now faces more long-term risk after management walked ...
PEG ratio: Prospective PE ratio / prospective average earnings growth: Most suitable when valuing high growth companies; Requires credible forecasts of growth; Can understate the higher risk associated with many high-growth stocks; Dividend yield: Dividend per share / share price: Useful for comparing cash returns with types of investments
The stock has bounced back since lowering its 2024 guidance in mid-January and is now up more than 10% year to date. ... (PEG) ratio of under 0.4. PEGs below 1 are typically considered undervalued ...