PEG Ratio vs Price To Earnings (P/E) Ratio

[@BerchtwaldElias1EH]

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[@divyt8013]

This guy saving every part of my life

[@TrevX2001]

Things missed here: EPS is dimensionally $'s /share (net income/outstanding shares). Additionally-- it should be pointed out that company A and B are both considered to be within the same part of the market... Target vs Walmart, Apple vs Microsoft, comparing Target Vs. Microsoft off of P/E and determining if one is "undervalued" is utterly asinine and a waste of time. Certain parts of the market tend to have a range for expected P/Es; which brings me to the point that they both could be considered undervalued or overvalued and you shouldnt make it relative to each other, but to the industry expectations in which they fall. This is how analyst and buys make the decision of being ok with a particular P/E or not. Doesnt matter if its 20 and 10 if the industries p/e is lower than 10... by standard they both over valued. Why would you buy either if that's the only thesis?

[@Milzzz-m6t]

Best explanation! Thank you

[@johnwaters7847]

PEG ratio is a very good indicator of an undervalue stock, usually I like to see that is below 1. However I have 3 metrics I like to analize. -Current/quick ratio -Debt to equity ratio -Book value: 2 or less (except technology sector)

[@cyric2010]

Thanks for the vid. Your explanation is clear and concise.

[@gemini_537]

I feel it is more reasonable to calculate PE/(1+EGR), because that gives an estimate of the future PE. In the example, B is still relatively undervalued, because if the stock prices don't change, B still has a lower PE.

[@1pwNz0mb13Z]

Clear and simple!

[@JorgeRamos-xw6dy]

Nice and simple explanation. Thank you!!!

[@rem6581]

my name jeff this helped so much thanka yu

[@Brad-qw1te]

Wtf

[@andreasbengtsson697]

You go Jeff don't ever let anyone get you down man I believe in you!

[@Selo.K.]

Is EGR the comparison from last two years, or is it an expectation for the next year ?

[@muhammadhamid3108]

Awsome content, Thank you so much

[@anothername2730]

Great video, thanks!!

[@TXLionHeart]

What does a negative PEG ratio imply? For example, I'm looking at a company with a trailing P/E ratio of 21, and a forward P/E ratio of 19. Yet, the PEG is -25.27. Doesn't the lower forward P/E ratio imply anticipated earnings growth? Why is the PEG ratio negative?

[@cheshstyles]

Could be negative growth

[@cheshstyles]

The stock could be oversold for example, lowering the p/e. But maybe it's over sold because earnings are decreasing (again for example) Also I am not (yet) an expert just my 2 cents

[@TXLionHeart]

@@cheshstyles Maybe I didn't write my question clearly. I'm curious how a stock can have a negative PEG ratio if the lower forward P/E implies earnings growth (because both trailing and forward P/Es use the current stock price). So, ignoring whether or not a stock is oversold, how can a PEG ratio be negative if the market is assuming earnings growth and earnings are currently positive?

[@cheshstyles]

@@TXLionHeart p/e is price to earnings. If the price and earnings both drop, but the earnings drop more, then the p/e ratio drops. If the earnings growth is negative, the output of the peg would be negative

[@cheshstyles]

Let's say the stock costs 20 and earns 1 per share. P/E is 20. Then the price drops to 9 and the forward earnings is .5. Your p/e is 18 (9÷.5). If your growth is negative (drops from 1 to .5) your peg would be negative

[@zalt8846]

where do you get the growth rate

[@anupamdas2352]

Nice comparison

[@forestw785]

I spent far too long trying to come up with a pegging joke and all I got for it is this

[@DavidInSydney1]

Been there done that 😢

[@iwian64]

What is high and what is low? Is 100 high or 20 ?

[@MillatinaN]

This is confusing.. 20/20% supposed to be 100 and 100/5% is 200 no?🤔

[@qwerty112934]

I was confused as well, but apparently all the data indicate that we should ignore the % in the caculation.

[@ameenahmed6437]

@@qwerty112934 because its always multiplied by 100 when you calculate a percentage of something. so here its the other way around.

[@tech4028]

It is exactly what you wrote & it makes totally sense. Think about it. Paying a P/E of 20 (with 20% EGR) is much better than paying a P/E of 100 (!!!) with 5% EGR. Conclusion: The lower the PEG, the better (or the cheaper). Does that make sense to you? Do you have any other questions?

[@tech4028]

Misunderstood your Q. Doesnt matter whether u see 20% as 20 or 0.2 in this case. Relation to each other will remain the same. One thing is important, though. STAY CONSISTENT.

[@Tamara-ju3lh]

You're supposed to take growth and multiply it by 100. He skipped that for some reason but I'm studying for the CPA exam and that's the official formula. Otherwise I would have been lost too.

[@kingtigercrownestate9102]

He divided company A by 20% and company B by only 5% Where did he com up with those two seemingly random and very different percentages?

[@onkarkokate4293]

Bro how to calculate PEG ratio for an index?

[@fernendo4]

I’m long Meta, FedEx and Tesla 💰😁

[@pritammaji670]

Hello thanks where are you from?sir

[@vidya014]

Weighted PEGROCI Strategy: PEfair ÷ 0.5*[ Gni÷(1+D/E) + ROCI ] = 1

[@salmark9080]

How do you put this into google sheets?

[@EliA-mm7ul]

By doing it yourself

[@ajgpolo1229]

Thank you

[@hcp0scratch]

TY!

[@Paul54WH]

at 3:12 "20 divided by 20% =1" No, it doesn't. If growth rate is zero, then PEG would be infinite.

[@joelwalczok2343]

who tf disliked??

[@kair3844]

Cheers

[@albertoruiz7793]

Only the 1% of people watch these type of videos