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Price-to-Earnings to Growth (PEG & PEGY Ratio

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### Growth at a Reasonable Price (GARP): Peter Lynch's PEG Ratio Made famous by legendary Fidelity Magellan fund manager **Peter Lynch** in *One Up on Wall Street*: - **Why P/E Alone is.

Reviewed by Noman Khan · MBA
Last updated:
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Input Values

📊 Results

Primary PEG & Valuation Summary
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Standard PEG Ratio Multiplier
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Dividend-Adjusted PEGY Ratio (Peter Lynch)
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Peter Lynch Fair Value at PEG = 1.0 ($ / share)
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Trailing P/E Ratio (Price / TTM EPS)
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Forward P/E Ratio (Price / Forward EPS)
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Margin of Safety vs Peter Lynch Fair Value (%)
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Growth at a Reasonable Price (GARP) Diagnostic
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📐 Formula

Price-to-Earnings to Growth (PEG & PEGY) & Peter Lynch GARP equations: P/E Ratio = Current Stock PriceTTM Diluted EPS P/E Ratio = Current Stock PriceForward 12-Month EPS Estimate PEG Ratio = P/E RatioExpected Annual EPS Growth Rate (%) Lynch Dividend-Adjusted PEGY Ratio = P/E RatioEPS Growth Rate (%) + Dividend Yield (%) Lynch Fair Value (at PEG = 1.0) = EPS × EPS Growth Rate (%) of Safety (%) = ( Lynch Fair Value - Market PriceMarket Price) × 100%

💡 Practical Example

For example, evaluating a growth stock trading at $145.00 with $5.80 TTM EPS, 20.0% expected earnings growth, and a 1.80% dividend yield: \. The \. Peter Lynch Fair Value is \ (trading at a 25.0% growth premium over the PEG 1.0 baseline).

📖 About Price-to-Earnings to Growth (PEG & PEGY Ratio

Growth at a Reasonable Price (GARP): Peter Lynch's PEG Ratio

Made famous by legendary Fidelity Magellan fund manager Peter Lynch in One Up on Wall Street:

  • Why P/E Alone is Misleading: A P/E of 30x sounds expensive, but if the company is growing earnings at 40% annually, it is actually a bargain compared to a stagnant utility with a P/E of 15x growing at 3%.
  • The PEG = 1.0 Rule: Lynch stated that a company's fair P/E multiple is equal to its percentage growth rate.

How to Use This Calculator

Enter Current Stock Market Price, Trailing Diluted Earnings Per Share (TTM EPS in $), Forward 12-Month Estimated EPS, Expected Annual Earnings Growth Rate (EPS CAGR %) into the input fields and the calculator will instantly compute Standard PEG Ratio Multiplier, Dividend-Adjusted PEGY Ratio (Peter Lynch). All calculations happen in real time — no submission or page reload required. You can adjust any input value and see the result update immediately.

Understanding Your Result

The Price-to-Earnings to Growth (PEG & PEGY Ratio) result gives you a precise, calculated value based on the inputs you provide. Compare your result against published benchmarks from NIST, BIPM, and ISO 80000 to assess where you stand. A single calculation is a useful starting point, but tracking this metric over time — as inputs change — gives you a much more complete picture.

Practical Application

The Price-to-Earnings to Growth (PEG & PEGY Ratio) is most useful when you have specific, real-world data to enter. For example: enter your actual Current Stock Market Price to calculate your standard peg ratio multiplier. The result helps engineers, scientists, students, and international traders make informed decisions about converting between measurement units for science, engineering, and commerce. This calculator is trusted by professionals and individuals alike because it follows the exact formulas validated by NIST, BIPM, and ISO

80000.

Accuracy Notes and Limitations

For legal or trade filings, verify conversions against official government or standards body references. The accuracy of any calculator is limited by the quality of the inputs provided. Double-check your units before entering values — unit errors are the most common source of incorrect results. For critical decisions, cross-reference with at least one additional source or professional consultation.

Frequently Used With

This calculator is often used alongside other conversion tools to build a complete analytical picture. Combining multiple related calculations provides stronger evidence for decisions than relying on any single metric. Browse the Conversion category to find complementary calculators for your specific use case.

💡 Financial Planning: Expert Principles & Risk Awareness

  • All calculations assume fixed rates and idealized conditions. Real-world results vary due to market volatility, inflation, fees, and taxes.
  • The Consumer Financial Protection Bureau (CFPB) recommends consulting a certified financial planner (CFP) for decisions involving significant sums.
  • Run at least three scenarios: optimistic, pessimistic, and most-likely — to understand the full range of potential outcomes before committing.
  • Inflation averages 2–3% annually in the US (Federal Reserve target). Long-term projections that ignore inflation significantly overstate future purchasing power.
  • Tax treatment varies widely by account type (IRA, 401k, brokerage), jurisdiction, and income level. Verify tax implications with a CPA before acting.
  • Compound interest works for you in savings/investments and against you in debt. The difference of even 1% in rate, sustained over decades, is enormous.
  • Emergency funds (3–6 months of expenses) should be established before optimizing for returns — financial security precedes financial growth.
  • Financial projections older than 12 months should be recalculated. Interest rates, tax brackets, and market conditions shift materially year to year.

Results are for informational and educational purposes only. Always verify critical decisions with a qualified professional.

Frequently Asked Questions

What is the PEG Ratio?

The PEG ratio divides a company's P/E ratio by its expected earnings growth rate: PEG = P/E ÷ EPS Growth Rate (%).

What is a good PEG ratio?

A PEG ratio under 1.0x is traditionally considered undervalued; 1.0x to 1.5x is fair value; and above 2.0x is considered expensive.

What is the Peter Lynch PEGY ratio?

The PEGY ratio incorporates dividend yield into the denominator: PEGY = P/E ÷, giving proper credit to dividend-paying companies.

What is the difference between Trailing PEG and Forward PEG?

Trailing PEG uses historical TTM EPS; Forward PEG uses Wall Street consensus forward 12-month EPS estimates for a more forward-looking valuation.

Can a PEG ratio be negative?

Yes, if a company is losing money (negative EPS) or if earnings are shrinking (negative growth rate), making the PEG ratio meaningless for unprofitable companies.

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