Free calculator · Valuation & Returns
Valuation Ratios, P/E and PEG
Calculates the price-to-earnings ratio and the growth-adjusted PEG ratio for a profitable company. Inputs are the market price per share, earnings per share, and the annual EPS growth rate.
By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026
From the author: Devon Coombs, CPA, MBA teaches finance at Santa Clara University and works with corporate teams on practical AI.
AI training for finance teams · Consulting · The 10 Laws of Finance
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Valuation Ratios, P/E and PEG
P/E ratio
40.0
price ÷ EPS
PEG ratio
0.80
P/E ÷ growth rate
A PEG below 1.0 is a heuristic for potentially undervalued relative to growth. Because most startup value sits in future growth rather than current earnings, PEG is often more informative than P/E alone, but both rest on a growth assumption that is hard to pin down early.
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This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.
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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.