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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.
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 its forward P/E is more than 40.5 times 2025 analyst estimates, the company's price/earnings-to-growth (PEG) ratio is only 0.65. A PEG ratio under 1 is generally view as undervalued, and ...
A 1.2 PEG ratio is a bargain for most stocks, let alone arguably the world's dominant AI company. It also doesn't seem likely that AI is a fad; there's too much money piling into the sector for ...
The PEG ratio compares a stock's valuation to the company's anticipated growth rate (a lower ratio means better value). I usually don't mind buying high-quality stocks at PEG ratios up to 2 to 2.5 ...
At its core, the PEG ratio helps compare valuation and expected growth. Generally speaking, a PEG ratio under 1 implies that the stock may be undervalued. Right now, Lilly's PEG ratio is 0.74.
In the spirit of better investing and in celebration of the first Worldwide Invest Better Day coming up on Sept. 25, Motley Fool analysts will be answering user- and reader-submitted questions ...
Polyethylene glycol (PEG; / ˌ p ɒ l i ˈ ɛ θ əl ˌ iː n ˈ ɡ l aɪ ˌ k ɒ l,-ˈ ɛ θ ɪ l-,-ˌ k ɔː l /) is a polyether compound derived from petroleum with many applications, from industrial manufacturing to medicine. PEG is also known as polyethylene oxide (PEO) or polyoxyethylene (POE), depending on its molecular weight.