Lynch's PEG
EliteGrowth at a reasonable price — the PEG ratioThe PEG ratio (Peter Lynch, One Up on Wall Street) divides a stock's P/E by its earnings-growth rate, so a fast grower can carry a high P/E and still look cheap. We use Yahoo's published PEG when present and positive, otherwise compute it as trailing P/E ÷ growth-percent. Names with no earnings (no P/E) or negative growth have no meaningful PEG and are left off the list. A low PEG is a starting point for research, not a verdict; cross-check the growth assumption. Not investment advice.
How it works
Peter Lynch's complaint about price-to-earnings was that it tells you nothing on its own. Forty times earnings is cheap for a company growing fifty percent a year and ruinous for one growing five. So divide the multiple by the growth.
Below 1 is the rule of thumb: you are paying less in multiple than you are getting in growth. Around 1 is fair. Well above 1 means the growth has to arrive exactly on schedule for the price to make sense.
When it misleads
The growth number is the weak link. It looks backwards, and a company coming off a depressed year prints a spectacular rate that will not repeat. A startlingly low PEG is more often a fluky base year than a bargain.
It breaks entirely on companies with no earnings, and it flatters cyclicals at the top of their cycle — which is precisely when they are most expensive.
| # | Ticker | PEG | P/E | Growth % | Verdict |
|---|---|---|---|---|---|
| 101 | QCOM | 0.77 | 19.87 | -23.0% | Undervalued |
| 102 | PSKY | 0.78 | 360.17 | -54.1% | Undervalued |
| 103 | CNC | 0.78 | n/a | n/a | Undervalued |
| 104 | CPAY | 0.78 | 24.74 | -7.0% | Undervalued |
| 105 | LULU | 0.79 | 8.50 | -5.9% | Undervalued |
| 106 | COIN | 0.79 | n/a | n/a | Undervalued |
| 107 | AMKR | 0.81 | 22.75 | 218.2% | Undervalued |
| 108 | CCL | 0.81 | 10.45 | -6.5% | Undervalued |
| 109 | ALB | 0.81 | 479.93 | 1996.2% | Undervalued |
| 110 | AES | 0.81 | 5.55 | n/a | Undervalued |
| 111 | META | 0.82 | 23.13 | -13.4% | Undervalued |
| 112 | WYNN | 0.82 | 22.11 | 106.1% | Undervalued |
| 113 | ADSK | 0.82 | 27.53 | 59.6% | Undervalued |
| 114 | BIDU | 0.82 | n/a | -71.7% | Undervalued |
| 115 | JBL | 0.82 | 39.13 | 27.6% | Undervalued |
| 116 | AAOI | 0.82 | n/a | n/a | Undervalued |
| 117 | CHTR | 0.82 | 3.79 | 16.1% | Undervalued |
| 118 | TSM | 0.83 | 32.59 | 77.4% | Undervalued |
| 119 | ENPH | 0.83 | 38.47 | -3.5% | Undervalued |
| 120 | HSY | 0.87 | 23.67 | 631.0% | Undervalued |
| 121 | RJF | 0.87 | 15.41 | 42.0% | Undervalued |
| 122 | CTSH | 0.88 | 12.86 | 3.8% | Undervalued |
| 123 | IVZ | 0.88 | n/a | 88.0% | Undervalued |
| 124 | PYPL | 0.88 | 10.06 | -3.1% | Undervalued |
| 125 | TEL | 0.88 | 20.10 | 19.2% | Undervalued |
| 126 | HII | 0.89 | 17.15 | 36.5% | Undervalued |
| 127 | VZ | 0.89 | 13.13 | -22.0% | Undervalued |
| 128 | SCHW | 0.90 | 19.47 | 42.6% | Undervalued |
| 129 | NOK | 0.90 | 76.14 | -97.9% | Undervalued |
| 130 | APTV | 0.91 | 20.68 | -35.3% | Undervalued |
| 131 | WDC | 0.91 | 17.72 | 984.1% | Undervalued |
| 132 | MDLZ | 0.92 | 22.58 | 144.9% | Undervalued |
| 133 | MPWR | 0.92 | 74.34 | 85.8% | Undervalued |
| 134 | BLK | 0.92 | 26.25 | 19.6% | Undervalued |
| 135 | ORCL | 0.92 | 27.88 | 21.9% | Undervalued |
| 136 | TXN | 0.92 | 39.29 | 51.8% | Undervalued |
| 137 | SMCI | 0.92 | 12.34 | 434.7% | Undervalued |
| 138 | TXT | 0.93 | 14.98 | 5.2% | Undervalued |
| 139 | CVX | 0.93 | 20.21 | 321.9% | Undervalued |
| 140 | APH | 0.93 | 40.88 | 59.3% | Undervalued |
| 141 | LVS | 0.93 | 17.05 | -19.8% | Undervalued |
| 142 | EXE | 0.93 | 8.47 | -45.5% | Undervalued |
| 143 | MELI | 0.93 | 52.33 | -10.9% | Undervalued |
| 144 | PNR | 0.93 | 15.11 | -11.1% | Undervalued |
| 145 | AMAT | 0.94 | 40.75 | 42.8% | Undervalued |
| 146 | IQV | 0.94 | 32.28 | -0.6% | Undervalued |
| 147 | EG | 0.94 | 7.82 | -11.5% | Undervalued |
| 148 | BAC | 0.95 | 14.41 | 34.1% | Undervalued |
| 149 | AEHR | 0.95 | n/a | n/a | Undervalued |
| 150 | NOW | 0.97 | 83.89 | -21.9% | Undervalued |