PEG ratio

Peter Lynch's P/E-adjusted-for-growth heuristic. PEG ≈ 1 means the multiple is in line with growth.

P/E ratio (×)

EPS growth rate (%/yr)

Use forward EPS growth (5-year analyst estimate or your own) for a forward-looking PEG. Trailing PEG with backward growth often misses inflection points.

PEG

1.33

P/E 20 ÷ growth 15%

Reasonably priced for growth. Lynch considered ≈ 1 fair value.

Formula

PEG = P/E ÷ EPS growth rate (%). The ratio normalises valuation by growth — a stock at 30× earnings growing 30%/yr (PEG 1.0) is "cheaper" for the growth than a stock at 15× growing 5%/yr (PEG 3.0).

Illustrative only. Calculator outputs assume constant inputs and ignore taxes, fees, inflation, and market volatility unless stated. For research and educational purposes only — not financial advice.