PEG Ratio

The PE ratio judged against how fast profits are actually growing.

PEG divides the PE by the profit growth rate. It exists because a high PE is only justified by growth, and PEG asks whether the growth is really there.

A PEG near 1 suggests the price and the growth are roughly in line. Well above 1 means you are paying for more growth than the company is currently delivering.

PE of 55 with profit growing 20% a year → PEG = 55 ÷ 20 = 2.8. The price assumes considerably faster growth than 20%.

PEG depends entirely on which growth number you use — last year's, the 3-year average, or someone's forecast. Two sources can quote very different PEGs for the same company and both be honest.

Analysis only: Supath AI does not give investment advice. Consult a SEBI-registered financial advisor before making investment decisions.