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PEG Ratio Calculator — Is the Growth Fairly Priced?

Calculate the PEG ratio in seconds (P/E ÷ growth): under 1 = cheap for its growth. Free, with formula, benchmarks and example.

Also available in German: PEG-Ratio Rechner — ist das Wachstum fair bepreist? →

Inputs

P/E ratio

Also called: Price/earnings, KGV

Where to find it: Listed on any stats page.

How to derive: Share price ÷ earnings per share (EPS).

%

Growth rate

Also called: Growth per year

Where to find it: Analyst estimates or the company’s historical earnings/revenue growth.

How to derive: (value now ÷ value n years ago)^(1/n) − 1. Estimate conservatively!

Result, live

PEG ratio
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Rule of thumb: PEG < 1 cheap · ≈ 1 fair · > 1.5 expensive. Requires positive growth.

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P/E Ratio CalculatorCompute the P/E ratio in seconds and see instantly whether a stock looks cheap — free, … Price-to-Book CalculatorPrice vs. balance-sheet equity. Dividend Yield CalculatorPayout vs. price — plus payout-ratio check. Compound Growth CalculatorFinal value from initial amount, monthly savings and return.

🔎 This valuation on real stocks

Currently below their fair value, valued with our full 21-model approach:

ALPMY +79%Astellas Pharma Inc 316140 +78%Woori Financial Group Inc SAN +77%Sanofi SA BBDC3 +74%Banco Bradesco S.A. YSHLF +73%Yangzijiang Shipbuilding (Holdings) Ltd ACA +71%Credit Agricole SA TIMB +71%TIM Participacoes SA ADBE +69%Adobe Systems Incorporated

The PEG ratio puts a stock's P/E in relation to its earnings growth. It shows whether a high P/E is justified by fast growth. Peter Lynch used it to find growing companies at a fair price.

How the formula works

You divide the P/E by the expected earnings growth rate in percent. A P/E of 30 looks expensive — at 30% growth it isn't.

PEG = P/E ÷ earnings growth % p.a.

Example: A stock trades at a P/E of 18 and grows earnings 24% a year. PEG = 18 ÷ 24 = 0.75 — growth outpaces the multiple.

How to read the result

  • Below 1.0: cheap — growth outpaces the valuation.
  • 1.0 to 1.5: fairly priced.
  • Above 1.5: expensive relative to growth.

What to watch out for

  • Works only with positive growth — with losses or zero growth the ratio is meaningless.
  • The result stands or falls with the growth estimate; analyst forecasts are often too optimistic.
  • PEG ignores dividends and debt. A low PEG built on fragile growth is a trap.

Frequently asked questions

Which growth rate should I use?
The common choice is expected earnings growth over the next three to five years per year. Past growth only works if it is likely to continue.
Why is a PEG below 1 attractive?
You pay less than one point of valuation for each point of growth — the market has not yet fully priced in the growth.
Where do I get the P/E and growth figures?
In our Fair Value Calculator the P/E and growth rates are already on file for 35,000+ stocks — no typing required.

Not financial advice · No buy/sell recommendations · Past performance is not a guarantee of future results.