Ratio

Peg Ratio: Understanding Forex Trading Dynamics

4 min read

trading

The price-earnings to growth ratio, commonly referred to as the PEG ratio, is a common financial ratio used by forex traders when analyzing stocks in the forex market. The PEG ratio provides an estimate of the stock’s value-versus-growth ratio and compares the stock’s price-to-earnings (P/E) ratio to its projected earnings growth rate. This allows traders to determine if a stock is overvalued, undervalued or fairly priced based on its expected earnings growth. The lower the PEG ratio, the more value of a stock when compared to its growth.