The PEG ratio (Price/Earnings to Growth ratio) is a financial metric used to assess a company's stock valuation by comparing its price-to-earnings (P/E) ratio to its expected earnings growth rate. It helps investors evaluate whether a stock is overvalued or undervalued relative to its growth potential. A PEG ratio of 1 generally indicates that a stock is fairly valued, while values below 1 suggest it may be undervalued, and values above 1 could indicate overvaluation.
