PEG Ratio Analysis
Understanding The PEG Ratio https://www.forbes.com/advisor/investing/peg-ratio/ The price/earnings-to-growth ratio, or the PEG ratio, is a metric that helps investors value a stock by taking into account a company’s market price, its earnings and its future growth prospects. Compare the PEG ratio to the price-to-earnings ratio (P/E ratio), a related measure that evaluates how expensive a stock is by comparing the company’s stock price to its earnings. The PEG ratio can provide a more complete picture of whether a stock is overvalued or undervalued. What Is the PEG Ratio? The PEG ratio compares a company’s P/E ratio to its expected rate of growth, a key factor for assessing its value. A company that’s expected to grow its revenue, earnings and cash flow at a high rate is, all other things being equal, more valuable than a company with little growth opportunity. Growth companies tend to have higher P/E ratios than value companies for this reason. Investors are willing to pay more fo