PEG Ratio 1yr

One year Price to Earnings to Growth (PEG) ratio

What Is the one-year Price to Earnings to Growth (PEG) Ratio?

The one-year price to earnings to growth ratio (PEG ratio) is calculated as a company's price-to-earnings (PE) ratio divided by its earnings growth over the past 12 months (Trailing 12 months).


The ratio is used to value a company while at the same time adding earnings growth to the valuation ratio.

It thus gives you a more complete company valuation picture than the standard PE ratio and lets you find undervalued or an attractive growth at a reasonable (GARP) investment.


Why do we use historical EPS growth

Why don’t we use expected or forecasted earnings growth you may be asking.

All the research we have seen have shown humans (incl. analysts) cannot forecast even if their lived depended on it.

That is why we used historical growth numbers.


What does the PEG ratio tell you?

It gives you a value and growth insight into the value of a stock.

A low PE ratio might let a company look cheap but adding its EPS growth gives you an additional insight.

For example, a low PEG ratio will make even high PE companies look attractive if they have high earnings growth.

The well-known investor Peter Lynch suggests that a fair value for a company is when its PE ratio is about equal to its EPS growth rate.

This should give you a PEG ratio of 1.0. For example, a PE ratio of 10 and EPS growth of 10%.

Thus, a PEG ratio greater than 1.0 may indicate a company is expensive, while a PEG ratio below 1.0 means a company is undervalued or an attractive growth at a reasonable (GARP) investment.


How is the PEG Ratio 1yr calculated?

The PEG Ratio 1yr is calculated as the Current PE ratio divided by Earnings per Share growth over the past 12 months.

Or as ((Current Price/ Current 12 months EPS​) / 12 month EPS Growth) /100


How to use the ratio

Available as a screening ratio: Yes

Available as an output column ratio: Yes (Look for it under the Valuation heading)


How to select the lowest PEG ratio companies

To find companies with the lowest PEG ratio set the slider from 0% to 10%.


Special PEG sorting

When you build a screen using the sliders, on order to avoid loss making companies, we have applied a custom sort to the PEG Ratio.

This is how it works:

A → PEG -0.5

B → PEG 0.5

C → PEG 1

D → PEG 1.5

The custom sort would sort them as B, C, D, A



The PEG Ratio is calculated on a trailing 12 months (TTM) basis.

This means the last twelve months (not the company’s financial year) is compared to the same period in the past.

We do this to make sure that the screener data includes the latest, most up to date, financial results.


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