PEG Ratio Calculator
Price/earnings-to-growth — a P/E that accounts for growth.
P/E is only half the story
A high P/E isn’t necessarily expensive if earnings are growing fast. The PEG ratio divides P/E by the growth rate: below 1 is often considered cheap, around 1 fair, above 1.5–2 expensive.
The formula
PEG = P/E ÷ annual earnings growth rate (in %). Popularised by Peter Lynch as a quick screen for growth at a reasonable price.
Frequently asked questions
What growth rate should I use?
Use a realistic forward earnings-growth estimate, ideally the sustainable rate over the next 3–5 years, not a one-off spike.