Price/Earnings-to-Growth (PEG) Ratio

[bwzheng2010]

📈 Price/Earnings-to-Growth (PEG) Ratio

1. What is the PEG Ratio?

The PEG Ratio enhances the traditional Price-to-Earnings (P/E) Ratio by incorporating a company’s growth rate.

$$PEG = \frac{P/E}{Growth\ Rate}$$

• A PEG ratio provides a more complete picture than P/E alone.
• It adjusts for growth — a high P/E stock may still be attractive if its earnings or revenue are growing rapidly.
• Rules of thumb:

• • PEG ≈ 1 → fairly valued relative to growth
• • PEG < 1 → undervalued (growth not fully priced in)
• • PEG > 1 → overvalued (price is high relative to growth expectations)
• • PEG < 0 → unprofitable or shrinking businesses

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2. How to Get PEG Ratio Using defeatbeta-api

import defeatbeta_api
from defeatbeta_api.data.ticker import Ticker

# Example: Navida (NVDA)
ticker = Ticker("NVDA")
peg_df = ticker.peg_ratio()

print(peg_df.to_string())

Example Output

report_date	close_price	fiscal_quarter	ttm_eps	ttm_pe	eps_yoy_growth	revenue_yoy_growth	peg_ratio_by_eps	peg_ratio_by_revenue
2023-07-31	46.73	2023-07-31	0.41	113.98	7.3333	1.0148	1.12	0.16
2023-08-01	46.51	2023-07-31	0.41	113.44	7.3333	1.0148	1.12	0.15
2023-08-02	44.27	2023-07-31	0.41	107.98	7.3333	1.0148	1.06	0.15
2023-08-03	44.51	2023-07-31	0.41	108.56	7.3333	1.0148	1.07	0.15
2023-08-04	44.68	2023-07-31	0.41	108.98	7.3333	1.0148	1.07	0.15
2023-08-07	45.42	2023-07-31	0.41	110.78	7.3333	1.0148	1.09	0.15
2023-08-08	44.66	2023-07-31	0.41	108.93	7.3333	1.0148	1.07	0.15
...	...	...	...	...	...	...	...	...
2025-08-25	179.81	2025-07-31	3.51	51.23	0.6119	0.5560	0.92	0.84
2025-08-26	181.77	2025-07-31	3.51	51.79	0.6119	0.5560	0.93	0.85
2025-08-27	181.60	2025-07-31	3.51	51.74	0.6119	0.5560	0.93	0.85
2025-08-28	180.17	2025-07-31	3.51	51.33	0.6119	0.5560	0.92	0.84
2025-08-29	174.18	2025-07-31	3.51	49.62	0.6119	0.5560	0.89	0.81

🔎 Columns explained:

• report_date → date of calculation
• close_price → stock price at report date
• fiscal_quarter → quarter-end date
• ttm_eps → trailing twelve months EPS
• ttm_pe → trailing twelve months P/E ratio
• eps_yoy_growth → year-over-year EPS growth rate (%)
• revenue_yoy_growth → year-over-year revenue growth rate (%)
• peg_ratio_by_eps → PEG ratio using EPS growth
• peg_ratio_by_revenue → PEG ratio using revenue growth

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3. How defeatbeta-api Implements the PEG Ratio

The method Ticker.peg_ratio() calculates two types of PEG ratios:

1. Inputs:

   • TTM P/E Ratio → from ttm_pe()
   • EPS YoY Growth → from quarterly_eps_yoy_growth()
   • Revenue YoY Growth → from quarterly_revenue_yoy_growth()

2. Aligning Data:

   • Dates are standardized to datetime64[ns].
   • pandas.merge_asof is used with direction="backward" to align the closest growth rates with the P/E data.

3. PEG by EPS Growth:

   • Formula:

$$PEG_{EPS} = \frac{TTM\ P/E}{EPS\ YoY\ Growth\%}$$

• If P/E < 0 or growth < 0, a negative PEG is reported (to reflect unprofitable or shrinking businesses).

4. PEG by Revenue Growth:

   • Formula:

$$PEG_{Revenue} = \frac{TTM\ P/E}{Revenue\ YoY\ Growth\%}$$

• Same treatment for negative values.

5. Final Output:

   • A DataFrame with both peg_ratio_by_eps and peg_ratio_by_revenue.
   • Results are rounded to 2 decimals.