Fundamentals & valuation
What is PEG ratio?
Hinglish mein padhein: PEG ratio kya hota hai?
The PEG ratio divides the P/E by the expected earnings growth rate, to judge whether a high P/E is justified by growth.
A PEG around 1 is often considered fair; well above 1 suggests you are paying heavily for growth.
It depends on growth forecasts, which are often wrong.
Related terms
- P/E ratioThe price-to-earnings ratio divides the share price by earnings per share. It shows how many rupees investors pay for each rupee of annual profit.
- GARP (Growth at a reasonable price)GARP investing looks for companies with steady earnings growth whose shares are not too expensive, blending growth and value styles.