Price/Earnings-to-Growth (PEG) Ratio Calculator

Compare P/E and earnings growth side by side and translate them into a single, growth-adjusted valuation signal. Spot when a stock’s multiple looks cheap, fair, or rich relative to its EPS growth outlook and broader equity valuation context.

By CalcMastery Editorial Team

PEG Ratio (Price/Earnings-to-Growth) Calculator

Calculate the PEG ratio = P/E ÷ expected earnings growth rate (in %). Compare valuation against growth so you can quickly see whether a stock looks cheap, fair, or rich relative to its growth profile.

Price & EPSP/E & Growth

Choose whether to compute the P/E from Price & EPS or provide a P/E ratio directly.

$

Current market price for one common share. Use the latest closing price or real-time quote.

$

Trailing 12-month EPS is common. Negative EPS means loss-making and makes PEG less meaningful.

Price-to-earnings multiple (for example 15, 20, 30). Use trailing or forward P/E consistently with your growth estimate.

%

Expected annual EPS growth in percent (for example 15 for 15%). PEG uses P/E ÷ growth rate (in %). Non‑positive growth makes PEG hard to interpret.

Scenarios
Load common profiles to see how valuation and growth interact: cheap vs growth, fairly priced compounder, expensive quality, and a low or negative growth case.
Value with solid growthFairly priced compounderQuality but rich vs growthLow‑growth defensiveNo or negative growth

Results

  • PEG Ratio—
  • P/E Ratio—
  • Growth Rate Used— %
  • Profile—

Enter your inputs above to calculate the results.

What is PEG Ratio?

The PEG ratio (price/earnings-to-growth) compares a company’s price-to-earnings (P/E) ratio with its expected earnings per share (EPS) growth rate.

It reframes a raw earnings multiple into a growth-adjusted metric, helping investors and corporate finance teams assess whether a stock’s valuation is aligned with its growth profile, capital allocation quality, and value-creation potential.

In practice, PEG links three core concepts: share price, current earnings power (EPS), expected EPS growth, and the underlying profitability drivers such as return on equity (ROE).

A PEG around 1 is often treated as “growth priced in fairly,” a PEG below 1 can indicate growth at a discount, while a PEG well above 1 suggests investors are paying a premium for anticipated growth and should scrutinize assumptions about margins, reinvestment, and competitive advantage.

Formula

PEG Ratio = (Price / Earnings (P / E) Ratio) / Annual EPS Growth Rate

Where:

  • P / E Ratio = Share Price ÷ Earnings per Share (EPS)
  • Annual EPS Growth Rate = forecast compound growth in EPS (expressed as a whole number, e.g., 15 for 15%)

Example

Assume a stock trades at $100 per share and generates $5 in EPS.

  • P / E Ratio = 100 ÷ 5 = 20x
  • Expected EPS growth rate over the next years = 15%

PEG Ratio:

PEG = 20 / 15 = 1.33

Interpretation: a PEG of 1.33 signals that investors are paying a growth-adjusted premium for this equity; relative to a PEG near 1, the valuation looks rich versus its forecast EPS growth and may require strong conviction in the company’s competitive moat, cash flow durability, and reinvestment returns.

How to Use the PEG Ratio Calculator

This tool computes the PEG ratio using either Price & EPS or an existing P/E multiple plus expected EPS growth. Follow the steps to input your data and interpret how expensive the stock is relative to its growth.

Select input method

  • Choose Price & EPS if you know share price and EPS. Choose P/E & Growth if you already have the P/E ratio.

Enter price and earnings or P/E

    • For Price & EPS, input Price per Share and Earnings per Share. The calculator derives P/E:
P / E = Price per Share / EPS

- For P/E & Growth, type the known P/E Ratio directly.

Input expected EPS growth

    • Enter the projected annual growth rate (e.g., 15). PEG is then calculated as:
PEG = (P / E Ratio) / Expected EPS Growth Rate

Review results

  • Check the PEG Ratio, P/E, Growth Rate Used, and the valuation Profile showing whether the stock looks expensive or reasonable relative to growth.

Adjust assumptions

  • Modify price, EPS, P/E, or growth to see how PEG changes. Use optional charts when available to visualize sensitivities.

Frequently Asked Questions

What PEG ratio value should I look for when using this calculator?

Around 1.0 is typically considered “fairly valued,” below 1.0 may suggest undervaluation, and above 1.0 indicates you're paying a premium for growth. Always compare against industry peers and verify the growth assumptions.

Which earnings growth rate should I enter?

Use a forward-looking EPS growth rate (1–5 year consensus or your own model). PEG is extremely sensitive to this input, so outdated or overly optimistic forecasts will distort the result.

How does this calculator improve on using the P/E ratio alone?

P/E shows how much you pay for current earnings. PEG divides that P/E by expected EPS growth, telling you whether a high multiple is supported by real growth or just inflated pricing.

When can PEG results be misleading?

PEG becomes unreliable for no-growth or negative-growth companies, highly cyclical earnings, or when EPS forecasts are unstable. Treat extreme PEG values with caution.

Sources & Methodology