Calculate the price earnings to growth (PEG) ratio, a valuation metric that measures the ratio of the price-to-earnings ratio to earnings growth rate.

The price-to-earnings growth (PEG) ratio provides a more comprehensive valuation measure compared to the P/E ratio alone. It takes into account a company’s earnings growth rate, allowing investors to assess whether a stock is overvalued or undervalued relative to its growth prospects.

The formula is as follows:

\[\text{Price Earnings to Growth Ratio} (\text{PEG}) = \text{Price Earnings Ratio} (P / E) / \text{Growth Rate}\]

Also known as: PEG ratio, price earnings growth.

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Calculate the Price to Earnings Growth Ratio (PEG) in Python

The Price to Earnings Growth Ratio (PEG) is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_price_to_earnings_growth_ratio as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

peg_ratio = toolkit.ratios.get_price_to_earnings_growth_ratio()

Which returns:

  2021 2022 2023 2024 2025
AAPL 0.443 2.3908 92.3141 -50.1989 1.6036
TSLA 0.322 0.2797 3.0479 -3.7616 -8.8524

Parameters

get_price_to_earnings_growth_ratio accepts the following parameters:

  • use_ebitda_growth_rate (bool, optional): Whether to use EBITDA growth rate for the calculation. Defaults to False.
  • include_dividends (bool, optional): Whether to include dividends in the calculation. Defaults to False.
  • diluted (bool, optional): Whether to use diluted shares in the calculation. Defaults to True.
  • rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
  • growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
  • lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
  • standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
Earnings per Share (EPS) Revenue per Share (RPS) Price to Earnings Ratio (PE) Forward Price to Earnings Ratio (Forward PE) Forward Price to Earnings Growth Ratio (Forward PEG) Book Value per Share Price to Book Ratio (PB) Interest Debt per Share CAPEX per Share Dividend Yield Weighted Dividend Yield Price to Cash Flow Ratio (P/CF)

The Ratios module page introduces the module, and the sidebar lists all of its functions.

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