scorecardresearchHow does the PEG ratio help determine stock’s true worth?

How does the PEG ratio help determine stock’s true worth?

Updated: 21 Jul 2022, 07:56 AM IST
TL;DR.
The PEG ratio is computed by dividing a company's price-to-earnings ratio by its average annual earnings growth rate. It could be helpful when analysing the growth rates of similar companies. Continue reading to learn more about how to assess an effective PEG ratio.
PEG ratio enables you to estimate the value of a stock while also taking the company's earnings growth into account.

PEG ratio enables you to estimate the value of a stock while also taking the company's earnings growth into account.