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ADVFN HomeHelpFinancialsKey FiguresPE Growth (PEG) Factor
Key Figures
  Market Capitalisation
  Shares in Issue
  Previous Close (price)
  Price Earnings Ratio (PE ratio)
  Dividend Cover
  Cash Flow PS
  Return on Equity (ROE)
  Operating Margin
  PE Growth (PEG) Factor
  EPS Growth Rate
  DPS Growth Rate
  Net Debt
  Gross Gearing
  Quick Assets
  Net Working Capital
  Intangibles/Fixed Assets
  Turnover PS
  Pre-Tax Profit PS
  Retained Profit PS
  Cash PS
  Net Cash PS
  NTAV PS
  NAV PS
  Spread

PE Growth (PEG) Factor

The PEG Factor, is the price-earnings (PE) ratio divided by the earnings per share (EPS) growth rate. The PEG factor measures the relative cost of earnings growth at the previous day's closing share price. The formula is the following:

= PE ratio / EPS Growth Rate


The PEG ratio is a tool that can help investors find undervalued stocks. When used in conjuction with other ratios, and the sector, it provides investors a perspective of how the market views a firm's growth potential in relation to EPS growth.

Note:

- A PEG factor equal to one, means that the market is pricing the stock to fully reflect its EPS growth potential.

- A PEG factor greater than one, indicates that either the stock is overvalued, or that the market expects its future EPS growth to be greater than the current consensus.

- A PEG factor less than one, indicates that either the stock is undervalued, or that the market does not expect the company to achieve its forcasted EPS growth.


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