PEG

PEG Ratio



The PEG ratio is a powerful formula which compares earnings growth and the Price Earnings Ratio:

Divide the current Price Earnings Ratio by the expected long-term growth rate (in earnings per share)*
More than 1.0 is poor;
Less than 1.0 is good;
Less than 0.5 is excellent.

With the
Fool Ratio Tend To
.50 or less Buy
.50 to .65 Look to buy
.65 to 1.00 Watch (or "hold")
1.00 to 1.30 Look to sell
1.30 to 1.70 Consider shorting
Over 1.70 Short