Home › Calculators › PEG Ratio Calculator
PEG Ratio Calculator
See whether a stock's P/E is justified by its earnings growth. Enter the P/E (or price and EPS) and the expected growth rate to get the PEG ratio, the dividend-adjusted PEG, the P/E and price that would give a PEG of 1, and compare several stocks at once.
Last updated:
Calculate from
$
$
Trailing or forward; match it to the growth estimate.
% / yr
Usually the next 3–5 years. Enter 18 for 18%.
%
For the dividend-adjusted PEG (PEGY).
Enter your values to see the result.
Advertisement
Advertisement
How to use the PEG Ratio Calculator
- Choose your input: a P/E ratio, or the share price and EPS.
- Enter the expected annual EPS growth as a percentage, typically for the next 3–5 years.
- Add the dividend yield if the stock pays one, to get the dividend-adjusted PEG.
- Read the PEG and its interpretation, plus the fair P/E and price at a PEG of 1.
- Compare stocks by typing one per line: name, P/E, growth, yield.
PEG ratio formulas
- PEG = (price ÷ EPS) ÷ EPS growth rate = P/E ÷ g
- PEGY (dividend-adjusted) = P/E ÷ (g + dividend yield)
- Fair P/E at PEG 1 = g (so 18% growth justifies a P/E of 18)
- Price at PEG 1 = EPS × g
Growth and yield are entered as whole numbers: 18% growth means g = 18.
How to read a PEG ratio
| PEG | Common reading | What to check |
|---|---|---|
| Below 0.5 | Very cheap for its growth | Is the growth forecast realistic? Is there a hidden risk? |
| 0.5–1.0 | Undervalued relative to growth | Quality of earnings and balance sheet |
| 1.0–1.2 | About fair value | How long growth can last |
| 1.2–2.0 | Fully valued | Whether quality or moat justifies a premium |
| Above 2.0 | Expensive for its growth | Downside if growth slows |
Tips
- Match the time frames: forward P/E with forward growth, trailing P/E with historical growth.
- Use PEGY for mature dividend payers; plain PEG penalizes them for returning cash instead of growing.
- Compare PEGs within the same sector; capital-heavy industries naturally trade at lower multiples.
- Treat the result as a screen, not a verdict. This tool is educational and not investment advice.
Frequently asked questions
How do you calculate the PEG ratio?
PEG = P/E ratio ÷ expected annual EPS growth rate (as a whole number). A stock with a P/E of 24 and 18% expected growth has a PEG of 24 ÷ 18 = 1.33.
What is a good PEG ratio?
A PEG of about 1 is often read as fairly valued, below 1 as cheap relative to growth and above 2 as expensive. These are rules of thumb popularized by investor Peter Lynch; compare PEGs within the same industry and check how reliable the growth estimate is.
What is the dividend-adjusted PEG (PEGY)?
PEGY = P/E ÷ (growth rate + dividend yield). It gives credit for dividends, which matter for slower-growing income stocks. A stock with P/E 16, 6% growth and 3.5% yield has a PEG of 2.67 but a PEGY of 1.68.
Which growth rate should I use?
Most sources use analysts' expected EPS growth over the next 3–5 years. Some use the past 5-year growth rate. Whatever you choose, use the same type for every stock you compare, and pair forward P/E with forward growth.
Why is the PEG ratio not meaningful for some stocks?
If earnings are negative, the P/E is not meaningful, and if growth is zero or negative, dividing by it gives a nonsensical or negative PEG. The PEG ratio is designed for profitable companies with growing earnings.
What are the limits of the PEG ratio?
It depends entirely on a growth forecast that may be wrong, ignores balance-sheet strength, and treats 30% growth for two years the same as 30% for ten. Very high growth rates rarely last, so a low PEG on a fast grower can be misleading.
What is the difference between PEG and P/E?
P/E shows how much investors pay for each $1 of current earnings. PEG divides that by growth, so a high-P/E company can still look reasonable if its earnings are growing quickly, and a low-P/E company can look expensive if it is not growing.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.
Related tools
P/E Ratio CalculatorPrice-to-earnings ratio, earnings yield and PEG ratio from share price, EPS and growth.Graham Number CalculatorGraham number √(22.5 × EPS × BVPS), Graham intrinsic value and margin of safety.EPS CalculatorBasic and diluted earnings per share from net income, preferred dividends and share count.Dividend Yield CalculatorFind a stock's dividend yield, yield on cost and the income your shares pay each year.Profit Margin CalculatorGross margin, markup, cost or price: solve for any one, single or bulk.Receipt MakerFill in a receipt template with items and tax, then print or save PDF.Car Depreciation CalculatorEstimate your car's value over time and its projected resale price.CTR CalculatorCalculate click-through rate and compare it with industry benchmarks.Conversion Rate CalculatorCalculate e-commerce conversion rate, revenue per visitor and goals.CPM CalculatorSolve CPM, cost, impressions, CTR and CPC for ad campaigns.Quote Estimate GeneratorCreate a quote or estimate with line items and tax, then save as PDF.ROAS Calculator (Return on Ad Spend)Calculate ROAS, break-even ROAS and profit for each ad channel.Customer Lifetime Value CalculatorCalculate customer lifetime value, LTV:CAC ratio and CAC payback from ARPU and churn.Churn Rate CalculatorCalculate customer churn and retention rates and convert monthly churn to annual.YouTube Money CalculatorEstimate YouTube earnings per day, month and year from views and RPM by niche.Instagram Engagement Rate CalculatorCalculate Instagram engagement rate by followers or reach and compare it to benchmarks.Ecommerce Profit CalculatorNet profit, margin, markup and break-even ROAS per order after fees, ads and returns.Amazon FBA CalculatorEstimate Amazon FBA fees, profit per unit, margin, ROI and break-even price.Etsy Fee CalculatorEtsy listing, transaction, processing and Offsite Ads fees, payout and net profit.eBay Fee CalculatoreBay final value fee, per-order fee, ad fees, payout and net profit on any sale.Stock Profit CalculatorStock trade profit and % return after commissions, plus the break-even sell price.Dollar Cost Averaging CalculatorSee units bought, average cost, value and profit for regular buys at your own price list.Startup Runway CalculatorProject cash, burn rate and runway month by month, with growth, break-even and zero-cash date.Break Even CalculatorFind break-even units and revenue, contribution margin, margin of safety and a cost-volume chart.SaaS Pricing CalculatorModel flat, per-seat, tiered and volume plans with annual discounts to get MRR, ARR and ARPU.Employee Cost CalculatorWork out the true cost of an employee: payroll taxes, benefits, overhead and real hourly cost.Inventory Turnover CalculatorInventory turnover ratio and days inventory outstanding from COGS or sales and average stock.Markup CalculatorFind the selling price from cost and markup, or the markup and margin from cost and price.Unit Price CalculatorCompare up to 4 products by price per ounce, pound, liter or item and find the best deal.Cap Rate CalculatorCalculate a rental property's NOI, cap rate and optional cash-on-cash return.Depreciation CalculatorStraight-line, declining balance, double declining and sum-of-years depreciation schedules.Crypto Profit CalculatorCalculate crypto trade profit, ROI and break-even price after buy and sell fees.PayPal Fee CalculatorWork out PayPal fees, what you receive, and how much to ask for to get an exact amount.Stripe Fee CalculatorCalculate Stripe fees and payouts, or how much to charge to receive an exact amount.Net Promoter Score CalculatorCalculate NPS from promoter, passive and detractor counts or pasted 0–10 survey scores.CPC CalculatorCalculate cost per click from ad spend and clicks, plus CPM, CTR, CPA and ROAS.WACC CalculatorWeighted average cost of capital from equity, debt, their costs and the tax rate.Payback Period CalculatorPayback and discounted payback period for an investment with even or uneven cash flows.Cash App Fee CalculatorCash App instant deposit, business and credit card fees, with a reverse mode.Cash Conversion Cycle CalculatorDIO, DSO, DPO and the cash conversion cycle in days from inventory, receivables and payables.Cost of Goods Sold CalculatorCOGS from beginning inventory, purchases, direct costs and ending inventory, plus gross margin.Commercial Rent CalculatorMonthly and annual commercial rent from price per sq ft, NNN/CAM and yearly escalations.1099 vs W-2 CalculatorCompare a W-2 salary with benefits to a 1099 contract rate and find the break-even hourly rate.Cost Per Lead CalculatorCPL from spend and leads or clicks, max budget for a target CPL and a channel comparison.Car Cost Per Mile CalculatorWork out what your car really costs per mile and per year, from fuel to depreciation.Cost Per Use CalculatorFind the true cost per use of an item, including upkeep and resale, and compare up to 3.Days Sales Outstanding CalculatorDSO, receivables turnover and average collection period from AR and credit sales.Debt to Equity Ratio CalculatorD/E ratio, debt ratio and equity multiplier from liabilities or debt and equity, explained.DCF CalculatorDiscounted cash flow model: projected FCF, terminal value and intrinsic value per share.Stacked Discount CalculatorFind the final price of stacked discounts like 20% + 10% off, with coupon and sales tax.Debt Service Coverage Ratio CalculatorDSCR from NOI and loan payments, max loan for a target ratio and lender pass/fail check.Early Payment Discount CalculatorSee the discount, amount due early and annual cost of skipping terms like 2/10 net 30.EBITDA CalculatorEBITDA, EBIT and EBITDA margin from net income or from revenue and operating expenses.Employee Turnover Rate CalculatorTurnover rate from headcount and separations, with annualized rate and retention.Startup Equity Dilution CalculatorCap table before and after a funding round with option pool top-up and dilution per holder.Fiverr Fee CalculatorFiverr seller earnings, buyer total with fees, and the gig price for a target.Gross Rent Multiplier CalculatorFind the GRM of a rental, estimate value from GRM and rent, or the rent a target GRM needs.Influencer Rate CalculatorEstimated price range per post, story or video from followers and engagement.Invoice Due Date CalculatorFind the due date for Net 30, Net 60, EOM or custom terms and the days left or overdue.Book Royalty CalculatorRoyalty per sale and monthly earnings for eBooks and paperbacks after printing costs.Landed Cost CalculatorTotal landed cost and cost per unit of imported goods, with duty, freight, fees and pricing.Late Payment Interest CalculatorCalculate days late, late interest and total due on an overdue invoice.LTV to CAC Ratio CalculatorLTV, CAC, the LTV:CAC ratio, payback months and a health rating for your unit economics.Marketing Budget CalculatorMarketing budget from % of revenue or customer goals, split by channel per year and month.Mercari Fee CalculatorMercari selling and processing fees, earnings and profit, with editable rates.MRR CalculatorMonthly recurring revenue, ARR, net new MRR, growth rate and ARPU from your plans.Net Revenue Retention CalculatorNRR and GRR from expansion, contraction and churn, with annualized NRR for monthly data.Net Operating Income CalculatorNOI for rental property: rent, vacancy, other income and itemized expenses with expense ratio.