Forward PEG Ratio Calculator

Formula

The formula to calculate the forward PEG ratio (PEG) is:

\[ PEG = \frac{PE}{G} \]

Where:

Forward PEG Ratio: A valuation metric used to determine the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company’s expected growth. It is an extension of the price-to-earnings (P/E) ratio that takes into account the expected earnings growth rate. A lower PEG ratio may indicate that a stock is undervalued given its expected growth, while a higher PEG ratio may suggest that a stock is overvalued.

Let's say the forward price-to-earnings ratio (PE) is 15 and the expected earnings growth rate (G) is 10%. Using the formula:

\[ PEG = \frac{15}{10} \]

We get:

\[ PEG = 1.5 \]

So, the forward PEG ratio is 1.5.