What Is The PEG Ratio In Relation To Stocks  Price Earnings Growth
So what is the PEG ratio in relation to stocks?
PEG stands for (price earnings growth), and is simply another way to evaluate the fundamentals of a company. Unlike a typical pricetoearnings ratio, a PEG takes into account a company's future annual earnings growth rate.
The chart below gives basic guidelines for the PEG. As always remember this is just a basic guideline. There are no guarantees that a low PEG will result in a positive stock pick. This is mainly because you are using earnings estimates; which basically means a best guess on the future earnings of the company which are not always very reliable.
As an example:
If a company has a P/E ratio of 20 and an annual earnings growth rate of 10 percent then the PEG would be 2.
Less than 0.50  Undervalued 
Between 0.50 and 1  Fair Value 
Greater than 1  Overvalued 
