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The 'PEG ratio' (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share , and the company's expected growth.
Its price-to-earnings-to-growth (PEG) ratio based on five-year earnings growth projections is a super-low 0.52, according to financial infrastructure and data provider LSEG.
A PEG ratio of less than 1 could signal a stock isn't overvalued and still may be worth buying. Right now, Palantir's forward PEG ratio is 0.3, down from more than 0.6 just a few weeks ago.
The stock's price-to-earnings-to-growth (PEG) ratio, which includes growth projections over the next five years, is also a sky-high 5.5, according to financial infrastructure and data provider LSEG.
The PEG ratio can be useful because it accounts for earnings growth over the course of several years. A general rule of thumb is that a PEG ratio above 1 signals the stock could be overvalued ...
Stock B is trading at a forward P/E of 30 and expected to grow at 25%. The PEG ratio for Stock A is 75% (15/20) and for Stock B is 120% (30/25). According to the PEG ratio, Stock A is a better purchase because it has a lower PEG ratio, or in other words, its future earnings growth can be purchased for a lower relative price than that of Stock B.
If the ratio approaches 200% -- as it did in 1999 and a part of 2000 -- you are playing with fire." As of November 2024, the Buffett indicator just reached 203.09%.
While its forward P/E is more than 40.5 times 2025 analyst estimates, the company's price/earnings-to-growth (PEG) ratio is only 0.65. A PEG ratio under 1 is generally view as undervalued, and ...