Price vs Earnings & Growth - System Factor Information
The primary measure of value as determined by earnings and earnings growth rates over various time frames compared to price.
Description:
The PEG factor is the most important in the system. Balancing the current earnings yield with growth rates from the past and projected growth rates for the near and long term future, it creates the cornerstone measure of value in the Low PEG Stocks.com rating system. Whe we talk about Low PEG Stocks we are talking about the ones that score highest for this factor.
Price vs Earnings & Growth is calculated using:
- Earnings Yield - The basic measure of profitability - how much does the company make (before interest and taxes) versus how much the company is worth (Enterprise Value).
- Growth Rates - How fast the company is growing, measured over a number of timeframes.
- PEG Metrics - A modified PEG ratio designed to measure the earnings and growth of a company relative to the price. This metric overcomes some major shortcomings of the standard PEG ratio.
Price vs Earnings & Growth is included in the calculation of:
- Total Score - The final number. The broadest and highest level rating for a stock.