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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.
Metrics like the price-to-earnings (P/E) ratio or price/earnings-to-growth (PEG) ratio are a good place to start, as they can help measure the company's growth potential in comparison to its stock ...
That values the stock at a forward P/E ratio of 17. Based on management's forecasted earnings growth rate, the stock's PEG ratio would be 1.1 to 1.3. The PEG ratio compares a stock's valuation to ...
Currently, American Express stock's PEG ratio is 1.4 (based on the numbers in the chart above), comfortably within the range I'll buy high-quality stocks at (up to a PEG ratio of 2 to 2.5).
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.
It's also a bargain, with shares trading below 9 times forward earnings and a super-low price/earnings-to-growth (PEG) ratio based on five-year growth projections of 0.2, according to LSEG. Should ...
Furthermore, a PEG ratio over 1 generally indicates that a stock is overvalued and that its price (market cap) is accelerating much faster than the expected growth in earnings per share over the ...
Right now, AMD's PEG ratio is 0.31 -- implying the stock is trading at a deep discount. Taking this a step further, AMD currently trades at a forward price-to-earnings (P/E) multiple of roughly 24 ...