Frequently asked questions
What is the PEG ratio?
PEG is the P/E divided by the expected annual earnings-growth rate. It accounts for the growth the P/E alone ignores — which is why Peter Lynch favours it.
What counts as a good PEG?
As a rough guide, a PEG around 1 is seen as fair, below 1 potentially undervalued, above 2 expensive. It depends heavily on how accurate the growth estimate is.
Is this a forecast or investment advice?
No. The result is an educational illustration based on assumptions you set — not a forecast, and not investment advice or a recommendation. You make the decision.