How this calculator works
Scale a positive-earnings P/E by expected annual EPS growth expressed in percentage points. Enter P/E directly, calculate EPS from company earnings and shares, or estimate growth as retention times beginning-equity ROE. Growth estimates are uncertain and must describe the same horizon and business assumptions as the earnings multiple.
Formula
PEG = P/E / annual EPS growth in percentage points. A 10% growth input means a divisor of 10, not 0.10. P/E = price / EPS; estimated growth = retention × ROE.
Worked example
A P/E of 20 and 10% expected growth give PEG 2. A P/E of 15 and 30% growth give 0.5. A $60 price and $3 EPS give P/E 20 before the growth adjustment.
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Frequently asked questions
Why is my result 100 times smaller than a raw division?
The conventional PEG divisor is a percentage number. The engine receives a fractional rate and multiplies it by 100.
Can growth be zero or negative?
This tool requires positive growth because the standard PEG interpretation breaks down for zero or falling earnings.
Does PEG below 1 prove undervaluation?
No. Growth duration, risk, payout, accounting quality and forecast reliability can all change the interpretation.