B
Glossary
PEG Ratio
Important — standard screening
What it measures
P/E divided by the profit growth rate. Below 1 the multiple is smaller than the growth rate; above 2 it is more than twice it. Both legs are trailing figures, not forecasts.
Formula
P/E ÷ profit growth rate (%)Benchmark
< 1 = multiple below the growth rate · > 2 = more than twice it
Related metrics
Source
Peter Lynch, One Up on Wall Street (1989)