'%3e%3c!--%20Dark%20blue%20left%20arm%20--%3e%3cpath%20d='M72%2072%20H174%20L286%20420%20H208%20Z'%20fill='url(%23leftBlue)'%20stroke='%230b1f4d'%20stroke-width='2'%20stroke-linejoin='round'%20/%3e%3c!--%20Bright%20blue%20upper-right%20arm%20--%3e%3cpath%20d='M338%2072%20H440%20L304%20320%20L264%20246%20Z'%20fill='url(%23rightBlue)'%20stroke='%231554d1'%20stroke-width='2'%20stroke-linejoin='round'%20/%3e%3c!--%20Bright%20blue%20lower-right%20arm%20--%3e%3cpath%20d='M350%20254%20H422%20L286%20420%20H208%20Z'%20fill='url(%23lowerBlue)'%20stroke='%231246c8'%20stroke-width='2'%20stroke-linejoin='round'%20/%3e%3c/g%3e%3c/svg%3e)
Nvidia
Estimated Fair Value$282.37
Current Price$229.28
Valuation Gap23.2%
Historical Median PEG0.54
Current PEG0.43
Price-to-Earnings-to-Growth
For informational and educational purposes only • Not investment advice.
Compare PEG valuations across companies
Apple
Estimated Fair Value$147.71
Current Price$336.64
Valuation Gap-56.1%
Historical Median PEG1.62
Current PEG3.70
Alphabet
Estimated Fair Value$454.43
Current Price$351.66
Valuation Gap29.2%
Historical Median PEG0.84
Current PEG0.65
Microsoft
Estimated Fair Value$574.29
Current Price$535.07
Valuation Gap7.3%
Historical Median PEG1.61
Current PEG1.50
Selected PEG Scenario
What is Price-to-Earnings-to-Growth (PEG) Valuation?
Price-to-Earnings-to-Growth (PEG) Valuation extends the traditional P/E approach by also considering a company's earnings growth.
The PEG ratio compares a company's Price-to-Earnings (P/E) ratio with its earnings growth rate. This helps show how the company's valuation relates to the growth in its earnings.
Historical PEG ratios show the growth-adjusted valuation multiples at which the company has traded in the past. They can be used as a reference for estimating Fair Value based on the company's Earnings per Share and historical earnings growth.
PEG Valuation is most useful for profitable companies with positive and relatively stable earnings growth.
How the PEG Model Works
The PEG model calculates historical earnings growth and PEG ratios, selects a valuation PEG, and converts it into a Fair P/E multiple that is applied to Earnings per Share.
Calculate Historical
EPS Growth
→
Calculate Historical
PEG
→
Select the
Valuation PEG
→
Estimate Fair
Value per Share
→
Compare With
Current Valuation
PEG Formula
Key Model Assumptions
• The company must have positive Earnings per Share.
• Current EPS is based on trailing twelve-month (TTM) earnings when four consecutive quarterly periods are available; otherwise, the latest annual EPS is used.
• Historical earnings growth is calculated only from years with valid positive earnings.
• Historical PEG ratios require positive earnings growth and a valid P/E ratio.
• The historical median PEG forms the Base valuation assumption.
• Conservative and optimistic scenarios adjust the historical median PEG.
• Historical earnings growth and PEG multiples may not remain representative if the company's growth or profitability changes materially.
• Current EPS is based on trailing twelve-month (TTM) earnings when four consecutive quarterly periods are available; otherwise, the latest annual EPS is used.
• Historical earnings growth is calculated only from years with valid positive earnings.
• Historical PEG ratios require positive earnings growth and a valid P/E ratio.
• The historical median PEG forms the Base valuation assumption.
• Conservative and optimistic scenarios adjust the historical median PEG.
• Historical earnings growth and PEG multiples may not remain representative if the company's growth or profitability changes materially.
Step 1 — Calculate Historical EPS Growth
Historical EPS Growth = EPS (Current Year) / EPS (Previous Year) − 1
Historical EPS Growth = Median of Valid Historical EPS Growth Rates
The model calculates annual EPS growth by comparing Earnings per Share with the previous year. The median of the valid historical growth rates is then used to estimate the company's Historical EPS Growth.
Step 2 — Calculate Historical PEG Ratios
Historical P/E = Year-End Share Price / Historical EPS
Historical PEG = Historical P/E / Historical EPS Growth (%)
Historical Median PEG = Median of the 10 most recent Valid Historical PEG Ratios
For each valid year, the model combines the historical P/E ratio with the corresponding EPS growth rate to calculate a PEG ratio. The median of these historical PEG ratios is used as the company's historical PEG benchmark.
Step 3 — Select the PEG Multiple
Selected PEG = Historical Median PEG × Scenario Adjustment
The selected scenario adjusts the historical median PEG to determine the valuation multiple used to estimate Fair Value.
Step 4 — Estimate Fair Value per Share
Fair P/E = Selected PEG × Historical EPS Growth (%)
Fair Value per Share = EPS × Fair P/E
The selected PEG is combined with historical EPS growth to estimate a Fair P/E multiple. This multiple is then applied to Earnings per Share to estimate Fair Value per Share.
Step 5 — Compare With the Current Market Valuation
Current P/E = Current Price / EPS
Current PEG = Current P/E / Historical EPS Growth (%)
Valuation Gap = Fair Value per Share / Current Price − 1
Current PEG shows the company's current valuation relative to its historical earnings growth, while the Valuation Gap compares the estimated Fair Value with the current stock price.