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.
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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.
Learn the concept
This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.
Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.