What is PEG ratio?

PEG ratio is PE Ratio divided by EPS growth. The lower PEG ratio the better. PE ratio can be from different periods (one year or more). It is important to notice that both PE and EPS ratio are projections, not statistical data from previous period. Therefore, PEG ratio might not be accurate. Usually, if PEG ratios is less than 1, that means that the stock is undervalued. Similarly, PEG ratio is greater than 1 means that the stock is overvalued.