PEG Ratio Calculator
Work out a stock's PEG ratio — its P/E ratio weighed against expected earnings growth — from share price, earnings per share, and a growth estimate. See the PEGY ratio too, and get a quick read on whether the price looks cheap or expensive for the growth on offer.
Inputs
P/E and growth rate roughly match, landing the PEG right around 1.0 — the classic "fair value" signal.
The current market price of one share.
Trailing twelve-month net income divided by shares outstanding.
Analyst consensus or your own multi-year growth estimate.
Used for the PEGY ratio, which credits dividend-paying stocks for income as well as growth.
PEG ratio formulas
P/E ratio
share price ÷ earnings per share (EPS)
PEG ratio
P/E ratio ÷ expected annual EPS growth rate (%)
PEGY ratio
P/E ratio ÷ (EPS growth rate % + dividend yield %)
Earnings yield
EPS ÷ share price × 100 (the inverse of P/E)
About the PEG Ratio Calculator
The PEG ratio (price/earnings to growth ratio) extends the P/E ratio by dividing it by the company's expected earnings growth rate. It was popularised by investor Peter Lynch as a way to compare stocks with very different growth profiles on a more even footing — a P/E of 30 can look expensive on its own, but reasonable if earnings are growing 30% a year.
This calculator works out the trailing P/E ratio from a share price and earnings per share (EPS), or from net income and shares outstanding if you do not already have an EPS figure. It then divides that P/E by your expected annual EPS growth rate to produce the PEG ratio, and optionally factors in dividend yield for the PEGY ratio — a version of PEG that gives dividend-paying stocks credit for income as well as growth.
A PEG below 1 is traditionally read as a sign a stock may be undervalued relative to its growth, while a PEG above 2 suggests the price has run ahead of realistic growth expectations. These are rules of thumb, not hard rules — the PEG ratio is only as reliable as the growth estimate that goes into it, and different sectors carry different typical PEG levels.
How to Use the PEG Ratio Calculator
- 1 Enter the current share price — the latest market price for one share of the stock.
- 2 Provide earnings per share — enter EPS directly if you know it, or switch to "Calculate from net income" and enter net income plus shares outstanding.
- 3 Enter an expected annual EPS growth rate — use an analyst consensus estimate or your own multi-year projection.
- 4 Add a dividend yield if the stock pays one, to also see the PEGY ratio.
- 5 Read your results — the PEG ratio, P/E ratio, earnings yield, and PEGY ratio update automatically as you type.
Frequently Asked Questions
What is a good PEG ratio? ▾
A PEG ratio around 1 is traditionally considered fair value — the stock's P/E roughly matches its growth rate. Below 1 can suggest undervaluation, and above 2 can suggest the price has outrun realistic growth. These are guideposts, not strict rules, and typical PEG levels vary by sector.
How is the PEG ratio different from the P/E ratio? ▾
P/E only compares price to current earnings, with no view on the future. PEG divides P/E by expected earnings growth, so it can show that a "high" P/E stock is actually reasonably priced if growth is fast enough — or that a "low" P/E stock is not really a bargain if growth is weak or negative.
What is the PEGY ratio? ▾
PEGY adds dividend yield to the growth rate before dividing into the P/E ratio: P/E ÷ (growth % + dividend yield %). It is useful for mature, dividend-paying companies where slower growth is offset by income, so PEG alone would understate their attractiveness.
Why does the growth rate estimate matter so much? ▾
The PEG ratio is only as good as the growth number you put in. Overly optimistic growth estimates make a stock look artificially cheap on a PEG basis, while overly conservative ones make it look artificially expensive. It helps to compare a few different growth scenarios rather than relying on a single estimate.
Can the PEG ratio be negative or undefined? ▾
Yes. If earnings are negative, the P/E ratio is not meaningful, so PEG is not either. If expected growth is zero or negative, dividing by it would produce a misleading or negative PEG, so this calculator shows "N/A" in both cases rather than a confusing number.