PEG Ratio
Price/Earnings-to-Growth Ratio
Valuation RatiosThe P/E ratio divided by expected earnings growth rate. Adjusts valuation for growth expectations.
Formula
PEG = P/E Ratio / Annual EPS Growth Rate
Why it matters
PEG < 1 may indicate undervaluation relative to growth. A high P/E stock with high growth may still be attractively priced.
Indian example
Related terms
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