Difference between revisions of "PEG Ratio"
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+ | *[[Enterprise Information System (EIS)]] | ||
+ | *[[Architectural Principles]] | ||
+ | *[[Congruence Model]] | ||
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+ | *[[ITIL Continual Service Improvement (CSI)]] | ||
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+ | *[[Quality Competitive Index (QCi) Model]] | ||
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Latest revision as of 12:48, 12 March 2024
What is PEG Ratio?
The price-to-earnings growth (PEG) ratio is a financial ratio that compares a company's price-to-earnings (P/E) ratio to its earnings growth rate. It is calculated by dividing the P/E ratio by the company's expected earnings growth rate. The PEG ratio is used to determine whether a company's stock price is overvalued or undervalued based on its earnings growth prospects.
A PEG ratio of 1 is considered to indicate that a company's stock price is fairly valued, while a ratio below 1 suggests that the stock may be undervalued, and a ratio above 1 suggests that the stock may be overvalued. However, it is important to note that the PEG ratio is just one tool that can be used to evaluate a stock, and it should be considered in the context of other financial and non-financial factors.
The PEG ratio can be useful for comparing companies within the same industry, as it takes into account both the P/E ratio and the earnings growth rate. It can also be helpful for comparing companies with different P/E ratios, as it adjusts for differences in earnings growth.
See Also
References
Top Pages on the CIO Wiki
- Run-Grow-Transform (RGT) Model
- Enterprise Information System (EIS)
- Architectural Principles
- Congruence Model
- Information Technology Controls (IT Controls)
- Value Chain Analysis
- Problem Tree Analysis
- ITIL Continual Service Improvement (CSI)
- IMAC (Install Move Add Change)
- Statement of Requirements (SoR)
- Quality Competitive Index (QCi) Model
- Threat Agent Risk Assessment (TARA)