PEG Ratio Calculator for Stocks
Enter a P/E ratio and annual earnings-per-share growth rate. The calculator divides one by the other instantly—without looking up a ticker or judging the stock.
PEG ratio
2.00
A 20.00 P/E divided by 10.00 growth points equals a PEG ratio of 2.00.
- P/E used
- 20.00×
- EPS growth used
- 10.00%
Calculation
20.00 ÷ 10.00 = 2.00
The growth divisor is 10, not 0.10, when the entered annual growth rate is 10%.
Method and sources. Arithmetic on your inputs—not a valuation, price target, or investment recommendation.
Want to test the growth assumption?
PEG compresses valuation and growth into one ratio; a fuller model makes more assumptions visible.
Open the intrinsic value calculator to test an explicit growth path. Growth up to 30% carries into its starting-growth field.
Test growth in a valuationHow to calculate a stock's PEG ratio
Enter a positive P/E ratio
Use the multiple you intend to analyze. CalcStocks does not fetch a ticker, price, EPS, or analyst estimate.
Enter annual EPS growth as a percent
Type 10 for 10%, not 0.10. Use a growth period and direction consistent with the P/E input.
Audit the division
The calculator divides P/E by the numerical percentage and shows the substituted values. It does not attach a good, bad, buy, or sell label.
PEG ratio formula
PEG means price/earnings-to-growth. The conventional calculation divides the P/E ratio by an annual EPS growth rate expressed as percentage points.
PEG ratio = P/E ratio ÷ annual EPS growth rate (%)
For a P/E of 20 and growth of 10%, calculate 20 ÷ 10 = 2.00. Dividing by 0.10 instead would produce 200 and would not follow the convention used by the cited examples.
Keep the P/E and growth periods consistent
A forward P/E should be paired with a forward-looking growth estimate. A trailing P/E should be paired with historical growth from a comparable period. Mixing them makes company comparisons less meaningful even when the arithmetic is correct.
What a PEG ratio can—and cannot—say
A result near 1 is often used as a rough valuation-to-growth reference, but it is not a universal fair-value line. Industry, growth horizon, earnings quality, cyclicality, debt, cash needs, and forecast reliability can all change the context. Compare ratios built from consistent inputs and inspect the assumptions.
Why zero and negative inputs are rejected
A zero growth rate makes division undefined. Negative earnings can make P/E unavailable or misleading, while declining growth can create a negative PEG that does not behave like the conventional positive ratio. This calculator fails closed instead of presenting those cases as comparable results.
PEG ratio calculation examples
The examples use the growth percentage as a whole-number divisor.
- Simple example. A P/E of 20 and expected annual EPS growth of 10% give 20 ÷ 10 = 2.00.
- Matched P/E and growth. A P/E of 20 and growth of 20% give 20 ÷ 20 = 1.00.
- Fidelity worked example. A P/E of 16.5 and projected three-year annual EPS growth of 10.8% give 16.5 ÷ 10.8 = 1.527… or 1.53 here; Fidelity presents it as 1.5 to one decimal.
- Same P/E, different growth. At a P/E of 24, 8% growth gives 3.00 while 16% growth gives 1.50. The growth assumption alone halves the result.
PEG ratio questions
The formula, input choices, interpretation, limitations, and browser-only privacy model.
Basics
What is the PEG ratio?
PEG is the price/earnings-to-growth ratio. It compares a stock's P/E multiple with an annual earnings-per-share growth rate by dividing P/E by the numerical growth percentage.
How is a PEG ratio calculated?
Divide the P/E ratio by annual EPS growth expressed in percentage points. A P/E of 20 and growth of 10% produce 20 ÷ 10 = 2.00.
What is the PEG ratio formula?
PEG ratio = P/E ratio ÷ annual EPS growth rate (%). If the growth rate is 12%, use 12 as the divisor, not 0.12.
What numbers do I need for this PEG calculator?
You need a positive P/E ratio and a positive annual EPS growth rate. The tool does not require a ticker, share price, or EPS because those are already summarized in the P/E input.
Does a PEG ratio have a unit?
It is generally presented as a ratio without a currency symbol. Its numerical convention depends on treating the growth percentage as percentage points.
How is PEG different from P/E?
P/E compares share price with earnings per share. PEG divides that P/E multiple by an earnings growth rate, adding a growth assumption to the comparison.
Inputs
Should I use forward or trailing P/E?
Either can be calculated, but keep the inputs consistent. Pair forward P/E with forward-looking growth and trailing P/E with historical growth from a comparable period. Label your result so comparisons use the same method.
Which earnings growth period should I use?
There is no single required horizon. Published PEG ratios may use one-year or multi-year annualized growth. Use the same horizon when comparing companies and disclose whether the growth is historical or projected.
Where can I find an EPS growth estimate?
Possible sources include company guidance, analyst-consensus research, and your own documented forecast. Check the period, update date, and whether the figure is annual or annualized. CalcStocks does not fetch or verify it.
Do I enter 10 or 0.10 for 10% growth?
Enter 10. The PEG convention used here divides the P/E ratio by the percentage as a whole number, so 20 ÷ 10 gives 2.00.
Can I calculate PEG when earnings or P/E are negative?
This calculator rejects a non-positive P/E. Negative earnings can make P/E unavailable or economically difficult to interpret, so a conventional positive PEG comparison is not produced.
What happens when EPS growth is zero or negative?
Zero would require division by zero, and negative growth produces a negative ratio with different meaning from the conventional comparison. The calculator rejects both and asks for a positive growth rate.
Interpretation
What is a good PEG ratio?
There is no universal good PEG ratio. A value near or below 1 is often used as a rough screening reference, but sector, growth horizon, forecast quality, and business risk matter. The tool does not turn a ratio into a recommendation.
What is a bad PEG ratio?
No cutoff is universally bad. A higher result means a larger P/E relative to the entered growth rate, but it may reflect durable economics, a poor growth estimate, or a different measurement period. Investigate the inputs instead of relying on one threshold.
Is a PEG ratio of 1.5 good?
The number alone cannot answer that. It means the P/E multiple is 1.5 times the numerical annual growth percentage under the chosen inputs. Compare the same PEG method across peers and test whether the growth assumption is credible.
Is a lower PEG ratio always better?
No. A low result can come from an unusually optimistic growth estimate, temporarily elevated earnings, cyclicality, weak earnings quality, or business risk. Lower arithmetic does not automatically mean lower investment risk.
Can I compare stocks using PEG ratios?
You can use PEG as one comparison, but calculate each ratio from consistent P/E definitions, growth horizons, and estimate dates. Industry differences, debt, dilution, cash flow, and profitability still require separate analysis.
Limits & privacy
How accurate is the PEG ratio calculator?
The division is deterministic, but the usefulness of the result depends on the P/E and growth inputs. Forecasts can change, accounting earnings can be volatile, and two providers may use different periods.
Does the calculator fetch live stock data?
No. CalcStocks does not look up tickers, prices, earnings, or forecasts. You enter both inputs and remain responsible for their date and definition.
Does CalcStocks store my P/E or growth rate?
No. The calculation runs in your browser and the inputs are not sent to the server. A copied share link includes the two values in its URL, so review it before sharing.
Is a PEG result investment advice or a buy signal?
No. It is arithmetic on visitor-entered assumptions. CalcStocks does not know your circumstances, recommend securities, or determine whether an estimate is reliable.
Continue the valuation work
Test growth assumptions and compare valuation methods instead of treating one screening ratio as a conclusion.
Intrinsic Value Calculator
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Benjamin Graham Formula Calculator
Graham's growth formula, the bond-yield revised version, and the Graham Number — all three on one page, clearly labelled as the different things they are.
CAPE Ratio Calculator
Cyclically adjusted P/E from your own earnings history, with each year inflation-adjusted — shown next to the plain one-year P/E so the difference is visible.
Method, primary sources, and limitations
Built by CalcStocks' owner and checked with automated math and page-interaction tests. No outside expert review is claimed. The calculator divides a positive P/E by a positive annual EPS growth percentage. It calculates from unrounded inputs and displays up to four decimal places when needed.
Primary-source worked example
Fidelity gives an example with a P/E of 16.5 and projected annual EPS growth of 10.8% over the next three years. Reproducing it with the displayed convention gives:
16.5 ÷ 10.8 = 1.527… → 1.53
Fidelity reports 1.5 because it rounds to one decimal. Schwab separately gives 20 ÷ 10 = 2, confirming that 10% is used as the divisor 10 rather than 0.10.
- Fidelity, Company Valuation Ratios — defines PEG as P/E divided by EPS growth and supplies the reproducible 16.5 and 10.8% example.
- Charles Schwab, PEG Ratio: Basics, Formula, and Risks — shows forward and trailing examples, says to pair consistent inputs, and details the uncertainty and limitations of growth assumptions.
- Investor.gov, Price-earnings (P/E) Ratio — defines the P/E input as current stock price divided by current earnings per share.
Sources checked . The cited organizations did not review or endorse CalcStocks.
PEG is sensitive to the selected P/E definition, growth horizon, and forecast quality. It ignores cash flow, debt, capital needs, dilution, earnings quality, and whether growth is sustainable. It is not a standalone valuation or investment decision.