PEG Ratio
P/E ratio divided by EPS growth rate.
The PEG ratio adjusts the P/E multiple for expected earnings growth. A PEG of 1.0 suggests the stock is fairly valued relative to its growth; below 1.0 may indicate undervaluation. It is most useful when comparing companies with different growth profiles within the same sector.
Formula
Related Terms
P/E Ratio
Share price divided by earnings per share — how much you pay per dollar of profit.
Market Capitalization
Share price multiplied by shares outstanding — the total equity value.
Enterprise Value (EV)
Market cap plus net debt — the total acquisition value of the business.
EV/EBITDA
Enterprise value divided by EBITDA — a capital-structure-neutral valuation metric.
EV/FCF
Enterprise value divided by free cash flow (TTM).
Free Cash Flow Yield
Free cash flow divided by enterprise value.