PEG Ratio Calculator

How to use the PEG Ratio Calculator

1. 1Enter the P/E ratio and the expected earnings growth.
2. 2Pick the units or options from the menus if the PEG ratio tool offers them.
3. 3Read the PEG ratio in the large result box.
4. 4Look at the extra rows for related figures.
5. 5Press Copy result to keep the answer.

When you need the PEG ratio

Investors use it as a quick screen to compare shares of different growth speeds, and students use it in valuation courses.

A PEG near 1 is often read as fair value, below 1 as cheap for the growth and above 1.5 or 2 as expensive. These are rules of thumb, not guarantees.

How the PEG ratio is worked out

PEG = P/E ratio ÷ expected annual earnings growth rate, with the growth rate written as a whole number percent. A share with a P/E of 20 and expected growth of 10% a year has a PEG of 2. With 25% growth the same P/E gives a PEG of 0.8.

Every answer on this page comes from that one rule, so you can check any result by hand with a calculator. The figures shown underneath, such as other units, are conversions of the same answer.

• Plain-language verdict
• Instant result
• Simple inputs

Mistakes to avoid with PEG ratio

Growth numbers are forecasts, and analysts often get them wrong. Use the same time frame for the P/E and the growth rate, and do not use it for firms with falling or zero growth.

On phone and computer

On a phone, type into the boxes one after another and read the PEG ratio underneath; Copy result puts it on the clipboard for a message or a note. On a computer the inputs sit on the left and the answer on the right, so you can change one figure and watch the PEG ratio move. The peg ratio calculator works the same on both.

Checking your PEG ratio by hand

A good habit is to test the peg ratio calculator with a case you already know. A share with a P/E of 20 and expected growth of 10% a year has a PEG of 2. With 25% growth the same P/E gives a PEG of 0.8.

If your own figures give a surprising answer, repeat the working yourself: PEG = P/E ratio ÷ expected annual earnings growth rate, with the growth rate written as a whole number percent. Small differences usually come from rounding, from mixing units, or from a typing slip in one of the inputs. PEG adds growth to the usual price and earnings picture. Check the P/E Ratio Calculator first, the Dividend Yield Calculator for income, and the CAGR Calculator to find an annual growth rate from past results.

Features

• Growth is a forecast
• Use one P/E type
• Not for zero or negative growth
• Clear messages when the PEG ratio inputs make no sense
• Copy the result with one tap
• Private: nothing is uploaded

Frequently asked questions