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By combining these two factors, the PEG ratio provides a more balanced view of a stock's valuation—especially useful when analyzing growth stocks. A lower PEG ratio may suggest that a stock is undervalued relative to its earnings growth, while a higher PEG ratio could indicate that it is overvalued.
This calculator requires two inputs:
The stock’s Price-to-Earnings (P/E) ratio
The projected annual earnings growth rate (as a percentage)
It helps investors make more informed decisions by identifying stocks that offer strong growth potential at a reasonable price.
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