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How do you calculate peg?

The first method of calculating PEG is to use a forward-looking growth rate for a company. This number would be an annualized growth rate (i.e., percentage earnings growth per year), usually covering a period of up to five years.

Is a peg above 1.0 a good price-to-earnings ratio?

A PEG above 1.0 can indicate an overvalued stock. The PEG will vary based on earnings growth forecasts and the time frame being considered. The price-to-earnings (P/E) ratio gives analysts a good fundamental indication of what investors are currently paying for a stock in relation to the company's earnings.

How does Yahoo Finance calculate peg?

Yahoo! Finance uses 5-year expected growth rate and a P/E based on the EPS estimate for the current fiscal year for calculating PEG (PEG for IBM is 1.26 on Aug 9, 2008 ). The NASDAQ web-site uses the forecast growth rate (based on the consensus of professional analysts) and forecast earnings over the next 12 months.

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