PEG ratio - Price/Earning to Growth
Price/Earning to Growth is a ratio used to determine stocks potential value while taking the company's expected future growth.
Peg Ratio= (P/E ratio) \ Growth
Generally speaking, the lower the PEG Ratio is, the investors are paying less for each unit of a stock. Every ratio around 1 is a good value, between 1 and 2 is considered to be normal.
Disadvantage of this ratio is in projection of future growth rate, which can change due to many factors.
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