Overview
PEG relates the P/E multiple to expected earnings growth.
Formula
PEG = P/E Ratio / EPS Growth Rate
How to Interpret
High Value
A high PEG can indicate the price is rich relative to growth.
Low Value
A low PEG can suggest growth is priced conservatively if forecasts are reliable.
Where It Is Used
Using a rolling 4-period lens for PEG Ratio typically reduces single-period decision noise.