PEG

RainieY

Priced for perfection? GOOG has a forward PE of 15.62 and a PEG ratio of 0.92. CapEx spending is not permanent, it can be stopped whenever they want but they don't do it because they see it being beneficial. The only time CapEx should hurt the stock is when the CapEx wasn't expected, or was necessary for the business. CapEx for fun, because you think it will be beneficial should have no impact on the stock price, because it's optional. It's the difference between repairing your roof because there's a leak or re-painting your walls to green because you don't like white. You need to repair the roof because if you don't, you will not be able to operate your core business. You paint the wall green from white because you think costumers will like the new color and more clients will come.

FartPolluter

Noone will change your mind. PEG ratio, growth and PE suggest underpriced relative to market. If MSFT was priced the same it would be sub 400

parth-parikh

fair, using adjusted earnings is the right way to look at it. I will take your 28x but 28x for a business growing operating income 30% and Cloud 103% is not expensive. that is a PEG of roughly 1. the S&P 500 trades at a similar multiple with much slower growth the question is not whether the PE is 15 or 28. it is whether that 30% growth holds while capex keeps rising. that is what decides if 28 is cheap or expensive...

BigWarning8696

Love it! just bought 300 shares today which makes it one of my top holdings. I've been eyeing this stock for quite a while. Its sitting under 5 year valuation for ttm P/E with a forward P/E of 18 and PEG of 0.45 which gives it an A+ grade for its industry. Unfortunately, the option chain kind of sucks. I think its as close to a sure thing as there is over the next 3-5 years for AI buildout. No debt and plenty of cash. I can't say how the price will respond with the upcoming ER, but it'll be a winner long-term.

Samjabr

Time to rotate out of the storage/memory/energy stocks into the mag7. They can't seem to please no matter how much they beat. FFS, Micron forward PE is 5 and SNDK PEG is 0.15? Meanwhile AAPL has a Forward PE of 40 and a PEG of 3.5 What kind of fking ignorant shit is that?

Low-Award5523

You make some points but your PT is the weakest part of this imo. Its already rerated from 60x earnings to 22x and youre saying its got another like 35% to go in 5 weeks. PEG is already .4, the bear case is priced in. You gotta connect the dots on that. Lets see if they continue to outperform this quarter. Im on the other side of this one.

WorkingGuy99percent

Man, there are a lot of companies with P/E's less than 20. A lot of them have PEG's that are getting pretty low. Off the top of my head, the following are cheap right now: NVDA, AMD, MU, AVGO, QCOM I am also picking up new companies CBRS and CRWV.

jrex035

FSLR printing new 52 week lows today on no news, down 36% ytd and 30% yoy. Absolutely unreal sell off on company with 8% FCF, no debt, US-based production, 10 pe, 7.9 forward pe, PEG of 0.47, and a 32% profit margin. Earnings are on Thursday and its expected to report its best quarter ever lmao

jrex035

FSLR printing new 52 week lows today on no news, down 36% ytd and 30% yoy. Absolutely unreal sell off on company with 8% FCF, no debt, US-based production, 10 pe, 7.9 forward pe, PEG of 0.47, and a 32% profit margin.

Kantmzk

I wonder why the PEG (1.08 according to Finviz) of GOOGL is so low? What is the anti-Alphabet narrative beyond AI-related spend and potentially negative FCF? Those "problems" can easily be fixed within a single quarter if nothing else.

DivineBladeOfSilver

This is the dangers of a lack of diversification and risk of short term investing. People saw (mostly) for years it’s been booming and said heck yeah forward P/E low, PEG ratios low, price targets high, easy buy!! And you wouldn’t be wrong. But it neglected to consider high debt in many companies, decreasing free cash flows, rising interest rates, an energy crisis caused by the president, US voter backlash against data centers, investor pressure to cut spending/costs for returns, general market sentiment, and more. If you’re invested and the reason you invested in what you did hasn’t broken then just hold unless you absolutely need that money and have no choice. You saw the asset is under valued and still making record earnings. It’s just short term sentiment and chaos causing fear

Panthera__Tigris

I get what you are saying but two counterpoints: 1. Apple is way overvalued. 2.7 PEG ratio? Why would I pay 40 P/E for a company growing in mid-teens. 2. It's not true that they own people's right hands. 90% of the world uses Samsung or one of the Chinese brands. I think it's kinda like Nike. They have the brand value but eventually people see through it and go for the cheaper option which is exactly the same. It may not happen tomorrow, but there is no moat.

_hiddenscout

Opened a position in BHE this morning. Boring type of company that I like. Valuation isn't too terrible. [https://stockanalysis.com/stocks/bhe/statistics/](https://stockanalysis.com/stocks/bhe/statistics/) Forward PE of 22, TTM PE of 49, PEG is 1.01, with P/FCF at 19. ROIC and margins are a bit lower than I like, but overall, the company hits a lot of themes that I really dig. What they do: >It provides design and engineering services and technology solutions, including new product design, prototype, testing, and related engineering services; and custom test and automation equipment design services. >The company also offers electronics manufacturing and testing services, such as printed circuit board assembly and test solutions, assembly of subsystems, circuitry and functionality testing of printed assemblies, environmental and stress testing, and component reliability testing; component engineering services; failure analysis; and systems assembly and test development solutions include subsystem and system-level integration, configuration, and testing for various industries, as well as in-circuit test, functional test, defect analysis, environmental stress screening, reliability testing, and custom test solutions. >In addition, it provides precision metal machining, complex vertically integrated assemblies, e-beam welding, full electromechanical assembly of machined subsystems, and system integration and test services. >Further, the company provides value-added support systems; supply chain management solutions; direct order fulfillment; and aftermarket non-warranty services, including repair, replacement, refurbishment, remanufacturing, exchange, systems upgrade, and spare parts manufacturing throughout a product’s life cycle. >It serves original equipment manufacturers in the advanced computing and communications, aerospace and defense, industrial, medical, and semiconductor capital equipment industries. Latest earnings presenetation: [https://s203.q4cdn.com/219528228/files/doc\_financials/2026/q2/BHE-Q2-2026-Investor-Presentation-vF.pdf](https://s203.q4cdn.com/219528228/files/doc_financials/2026/q2/BHE-Q2-2026-Investor-Presentation-vF.pdf)

Ancient_Bobcat_9150

I find it tricky to use just one metric for this company. A more accurate metric would be forward PEG (Forward PE/EPS growth rate). It sits around 1.65, you can find the metric online or do your own calculation for a more accurate and up-to-date number. 1.65 looks fairly valued. You want at least under 1.5, ideally under 1.0

FinndBors

And it tends to be boom/bust. Intelligent investors know this in which why you see PE and PEG ratios look really good. They know that there is a risk on how long the boom continues.

TickTockTaudit

Expanding earnings growth means falling forward PE and falling PEG ratio. Which means the music is still playing and a reprice is appropriate. This pullback right before tech earnings makes sense to shake out pansies and Nancies. All the big names have a 12 month PEG under 1. TQQQ, TECL, and SOCL all have a 20+% upside by the end of the year.

CallMePyro

The truck to doing this to decide which fundamentals matter to you (PEG, TTM P/E, DTI, P/S, etc) and then go back in time and test them against companies like AOL and Cisco. You can't blindly say "buying individual stocks sometimes doesn't work out" because each one is unique, both in business fundamentals and leadership but also macroeconomics and political environment.

lark0317

Yeah, it will be a test if hyperscalers significantly reduce spending, but non-hyperscaler revenue grew 138% YoY last quarter. Hyperscalers were the front end of the story for sure, but I think there's some undervaluing of the growth from their other revenue sources. And, honestly, never have I seen so much fretting over a stock being part of a bubble and being at risk of a crash that has a PEG ratio of 0.27. It's kinda wild.

jrex035

>PE is one metric, you need to look at cash flow, growth. Aapl still leads. PB of ***46.6***, P/FCF of 36.74, PEG of 3.36, FCF yield of 2.7%, PS of 10.76, forward PS of 9.8. By just about every metric its overvalued. Great that its got cash on hand, what's it gonna do with that money?

jrex035

I'm genuinely dumbfounded by the price action. Its a $5T market cap equity with a pe of 40, PEG of 3.36, and a 2.7% FCF yield lmao It's 10 year average pe is ***25***

jrex035

Maybe, but WMT in particular is laughably overpriced. 42 pe, 38.66 forward pe, 1.43% FCF yield, 9.39 pb, PEG or 3.62, P/FCF of 69.82, debt/equity of .72, debt/FCF 5.56. It's a safe "value" equity that's already priced at a premium. It's a place to park cash because it probably won't fall much, not because it's got room to grow. WMT's 10 year average pe is 28

TickTockTaudit

You guys need to switch from SPY to the Qs, seriously. Tech is the only sector anyone cares about and the PEG is much more attractive with a bigger upside. QQQ options and swinging TQQQ is the move. Stop being gay.

Huffnpuff9

It's PEG bro....fuck

IBangTokyoWife

I'm a buyer at these prices. Excellent PEG and a much higher floor as they've grown into their valuation

_hiddenscout

Anytime! Learning to screen is what really helped me the most in my investment journey. It's cliche, but I really think Buffet's tip around: 'It's Better To Buy A Wonderful Company At Fair Price Than A Fair Company At A Wonderful Price', is one of the best he's given. The question then becomes, what is a wonderful company and what is a fair price. That's why I like to screen, it helps me set the idea of what I think a wonderful company is, which is stull like ROIC, revenue growth. Then the other question is what is a fair price, which is why I like looking at things like P/FCF and PEG. That's what is so interesting about investing, you can totally set up different criteria and define what you think a wonderful company is and could be different than mine. Been saying for years here, valuations matter, because it's really about the price of what you pay for a piece of a company that will help define what kind of returns you get. One thing that people get wrong a lot is the fundamentals thing. Like fundamentals matter more for a long term investment, not day to day trading. All this is trying to set you up to do succeed. Like not all the names I've suggested have done well or have been home runs. Like I've suggested some bad names, but overall I stand by track record. I also got lucky with timing. Before AI was a thing, I was going long with electrification, data center, reshoring plays. That's also how I like to invest, with some narratives. I like the idea of combining the idea of what could be big long term growth or tailwinds and then pair it with companies with GARPy fundamentals. This approach basically helped outperform the market the last 5 years without having to be a bear or bull or do very much.

_hiddenscout

Basically any name I bring up here comes from just screening. Like this is one my base screeners: [https://finviz.com/screener?v=111&f=fa\_epsqoq\_o5%2Cfa\_peg\_u2%2Cfa\_pfcf\_u40%2Cfa\_quickratio\_o1%2Cfa\_roi\_o10%2Cfa\_salesqoq\_o10&ft=2&o=industry](https://finviz.com/screener?v=111&f=fa_epsqoq_o5%2Cfa_peg_u2%2Cfa_pfcf_u40%2Cfa_quickratio_o1%2Cfa_roi_o10%2Cfa_salesqoq_o10&ft=2&o=industry) I also use stockanalysis, but i can't share the screener, since the parameters are set locally. But they are awesome as well. I use both, since they calculate the PEG differently, so it's nice to use more than source of truth. You can just set the parameters there to be the same. I'm a GARPy investor, so my goal is to buy growth, but something that is at a good price or undervalued. Some of the things I look at are things that I consider make good companies, like ROIC that is above average, Quick ratio above 1, meaning they can handle their inventory/cash/make acquitisions, look at short term EPS and Revenue growth and a P/FCF under 40, since I like P/FCF better than PE.

i_empathetic

You need buyers of the stock. Look at what NVDA did for a year between summer 25 and 26, essentially flat despite their PEG ratio being cut more than in half with triple beats every quarter. Because everybody who wanted NVDA already had it, and lots of other stocks became high performers, absorbing buyers in other prospects. MU is going to experience the same process. Things have to get fundamentally so rosy and sustained that the market decides to reallocate out of existing holdings and heavier into MU. That's going to take a bit. Everyone who believes the "cycle is years longer" angle is already in. The landscape has to convince the more conservative parts of the market to come over, or convince people to get out of AMD or META or whatever other excellent growth prospects and go heavier into MU. In short, buyers are no longer rushing the doors, fundamentals don't force more buyers if there just physically aren't any left.

imacompnerd

How is it similar? I listed a PEG of 0.7 (which is arguably one of the most important metrics for growth to valuation). PLTR is 3 times higher than RDDT's, which helps show just how underpriced RDDT is compared to other "similar" alternatives.

imacompnerd

lol. PLTR is trading at 60 times *revenue,* forward PE of over 100 (4 times higher than RDDT’s) and has a PEG of over 2. That means you can buy RDDT for 1/3rd the price / valuation per growth as PLTR.

imacompnerd

So, q2 was over $800 million in revenue, which already annualizes to $3.6 billion I revenue, even if growth stopped here, but they’re still growing 45-55%, with 91% gross margins. Let’s flip it around, what stocks are growing over 60% YoY for 8 quarters straight, that aren’t cyclical (eg, memory, chips, etc…), aren’t SaaS, have almost zero capex, already has a high FCF margin, and has a better valuation multiple with a PEG around 0.7?

imacompnerd

I use Reddit every day, quite a bit. Beyond that, I don't see ads at all since I pay for the Reddit premium. With that said, I don't have to guess how many ads others are seeing nor if anyone else is clicking on them. The quarterly earnings show the numbers, which have been incredible! Show me another company that's had: * 8 consecutive quarters of 60%+ YoY revenue growth * 90%+ gross margins * Dramatically increasing FCF margins (and is already extremely FCF positive) * Has billions in net cash on hand * Trades at a PEG of around 0.7 * Has consensus revenue growth estimates for the next 3 years at 35% (which is what they also had for 2025 and 2026, which then had to be dramatically increased as RDDT wildly beat revenue and earnings estimates) * Isn't a SaaS * Is not a cyclical company (such as chip stocks) Seriously, list some other companies that are as profitable and growing as fast as RDDT, that have a PEG in the 0.7 range.

femalediesinendgame

If that’s your argument then just accept it doesn’t matter. Everything is about growth and speculative future earnings in the tech sector. At least look at PEG too if you insist on keeping PE. A company growing revenue at 40% can justify a PE of 40, its trailing PEG is a totally healthy 1. But Walmart for example having a PE of 40 with a terrible 5% a year growth is overvalued to the tits. It’s PEG is a terribly high 8. Or, I’ll also put it this way, PE is relative if you express it in percentiles of the company’s recent 2-3 years worth of PE values. If the current value corresponds to <50th percentile the stock is most likely slightly to highly undervalued (depending on exact percentage), though not necessarily if something in its core business changed, and if it corresponds to >50th percentile it’s most likely elevated. Also PE is not a blanket term, it is sector dependent. An energy stock carries more risk due to geopolitical vulnerability, capital intensive structure, terrible logistics and much more. Its average PE is always going to be compressed. A tech stock carries way less risk because it is capital/asset light, doesn’t have to have physical representation everywhere, is not very much affected by geopolitical tensions, and most importantly, due to almost half of all people on the planet having access to the internet it can grow rapidly. A stocks current price is composed of two parts: one is the price you pay for the value that’s currently available and proven to exist (for example earnings) and the other is the price you pay for speculation on possible future value and earnings. For most stocks in tech I’ve looked at, the first part is almost always less than or equal to the second part. Yes there is a way to proxy them and get a rough idea, Google “EPV by Bruce Greenwald”. You can use his logic to derive a current “fair price” base solely on proven earnings.

BigWarning8696

True, but what people sitting on the sidelines trying to predict rather than just react to what is in front of them miss is the once per generation melt-up phase before the crash. This is the absolute best time to invest. The NASDAQ ran up 600% the prior 4 years of the 1999 crash (compared to 160% currently). The last year was an 85% gain alone (19% currently). Forward P/E and PEG prior to the crash were way high, now its actually lower than average. I'm not saying we won't crash, I absolutely think we will at some point, but I think we'll have at least 1 or 2 great years before that happens and those on the sidelines will be missing the melt-up phase. I was a young an naive college kid during the 99 crash and got my ass handed to me, luckily with a very small account. But I did see the 2008 crash and COVID crash coming and was in cash during that time. The indicators to look for are not rocket science. Focus on earnings growth and beats/misses. It really is that easy

ah-98-2014

PEG ur a$$

wayfarer8888

I don't get the idea of SPCX being more than an emergency Iridium network for cell phones. You cannot use satellites from indoors and a relais station on your home doesn't fix that, cell phone reception you need everywhere you go and most time people spend indoors. Even in a forest, valley or big city satellite reception outdoors is crappy. So how is this supposed to work without a massive build-out, which would make it uncompetitive? If SPCX bought T-Mobile or Verizon, yea, but than their stock valuation goes down as PEG becomes less favorable. It's a miracle how long these lofty valuations can be perpetuated on BS, like building a chip fab without the experience, humanoid robots without proven capabilities, space data centers that go against thermodynamics and most basic economic reasoning, removing the workhorse Falcon 9 for a complex concept that keeps failing reentry and recovery. I cannot remember companies doing so many missteps and the stock price stays steady, although I didn't follow Enron too closely back in the days.

Huffnpuff9

They have no current p/e or PEG because of trailing net losses... that's a hard no for me... but do your thing.

milkplantation

A forward PEG of 0.7 only looks cheap if today's extraordinary earnings growth are sustainable. Factset forecasts 32.4% earnings growth for 2026, but estimates for 2027 are closer to 15%. The PEG look artificially attractive which is why markets aren't screaming right now. Then consider the broader picture: * Shiller CAPE is nearly 42, approaching its dot com peak * 5 and 10 year treasury yields are around 5.0% and 5.3%, near multi decade highs * Markets are pricing in another 25 basis point fed hike in December * The S&P 500 is more concentrated than during the dot com bubble, with its top 10 holdings representing nearly 38% of the index * IPO proceeds have surged and some blockbuster listings are approaching * Market breadth has eroded in a major way with the average S&P 500 stock actually already in a bear phase, down more than 20 per cent from the highs * On the point of breadth, the median stock is down 17 per cent. As recently as Friday, there was not one member of the S&P 500 at a new 52 week high, but 204 companies, or over 40 per cent of the index, are more than 20 per cent below their highs Of course, none of this guarantees a correction, but declaring the market "significantly undervalued" based on one forward looking metric seems very optimistic, especially when so much earnings growth depends upon ongoing AI investment. Lastly, everyone jumps and lurches at anyone expressing caution on here but only 27.1% of retail investors are bearish on stocks. You need to go back to Liberation Day to find the last time that there were more bears than bulls. That's a warning sign and of itself.

PidgeySlayer268

What’s PEG?

CanYouPleaseChill

Firstly, PEG is based on estimated growth. Analysts can't even predict the earnings for next quarter, never mind the next year. Secondly, free cash flows of Big Tech are significantly lower than earnings. If they don't start making significantly returns on capital soon, depreciation expenses will dramatically lower "earnings growth".

fiveonethreefour

Market cap is meaningless, it has no context. PE, PEG, cash flow, price to book are what matters.

nick_riviera24

XOM (Exxon) was under $100 when Trump took office. Now at $164. PE is about 13, with a predicted growth of 11% per yr over the next 3-5 yrs that gives you a Solid PEG. The short interest is under 1%. OXY (Occidental petroleum) has a PE of about 9 and forecasted compounded annual growth of about 11 for a PEG less than 1. About 2% short interest. Chevron and Oxy each make up about 7% of Berkshire Hathaways portfolio. Berk owns about 27% of OXY stock. You could do worse than copying Warren Buffet, but if this is not fun to you, you can also just by BRK.B. When Trump took office in ‘24 their share were about $ 350, and now they sit about 500. If you are risk averse, they are worth considering. I’m not a huge fan of military investments, but my holding in ATI has gone from $45/share in Nov ‘24 to about $190 a share today. They make high performance materials like titanium and they also make parts using their own high performance materials. Defense loves this stuff for making planes and rockets, but non-military uses for their materials are high. They are a bit pricey at PE 38 but with predicted CAGR of 32 I am glad to have it in my portfolio. God luck! Timing the market is tough. I don’t invest in Trump. I try to invest in companies that can do well regardless of who is in office or what the news brings today. I think trying to guess when to enter or exit the market Is too hard. I have picked my share of duds, but over the long haul, I do ok. If you don’t like to follow individual stocks, accept that your returns will likely be average. Also worth noting that average returns are pretty damn good Here is a fun story: https://yis.org/what-if-you-only-invested-at-market-peaks-by-ben-carlson/ This story is about Bob, and bad investor who only ever buys stocks at the peaks. Bob is terrible at stock investing, but he does pretty darn good. Bob only has one thing going for him. He never jumps out of the market. Through thick and thin, he just stays in.

BigWarning8696

"Bull markets climb a wall of worry". I've been investing since the dot com crash and I don't remember a time when I didn't read that the markets were going to crash (or crash further). All I look at now is earnings and earning revisions. The historical PEG of the SP500 is 1.3x. We are currently at 0.7x. This market is significantly UNDERVALUED. And note, the market has been beating estimates so the real forward PEG is likely lower than 0.7x

BigWarning8696

I think this is a new leg up for the market. Historically, midterm Octobers are a +4% month vs regular Octobers being +1%. And we've been sideways for 6 months to consolidate a bit. Forward PEG for the market now is historically very low and will get lower after the next round of ERs

Double_Suggestion385

The market is actually undervalued right now. PEG is half of what it was during dot-com and GFC. Fwd-PE is low.

jrex035

Agreed that energy infrastructure in the US (and most of the world) needs upgrading/building out and that companies like PWR and ETN stand to benefit. But looking at their valuations, is this not already priced in? PWR has a TTM pe of 78, forward pe of 37, ps of 3, pb of 10.6, p/FCF of 45, PEG of 1.78, ev/earnings of 82, etc. Its up more than 500% in the past 5 years

flecheverte

You focus mostly on PEG, or you just wanted to underline the importance of growth, among other factors?

Glittering_Dig3798

Isn't "growth packed in" as you put it how the market has always worked? PEG ratios and allat? "In the short run, the market is a voting machine, but in the long run, it is a weighing machine"

Dangerous_Position79

Both Unity and Applovin are growing their market share. The size of the market itself is growing and they're both still taking market share from others.  APP just has to meet management's own Q3 guidance and share forward guidance in line with expectations (which already assumes decelerating growth) and the stock will rocket higher because the PEG ratio is well below 1 at the current price.

Think_Currency_8586

lol this is just false their current 5 year PEG is 1.4 if the stock price fell by over 50% the PEG would be closer to .5

Double_Suggestion385

Why? That's still a PEG over 1. When you only look at PE then a lot of things won't make much sense.

Double_Suggestion385

That's still a PEG over 1 When you try to value things on PE alone then yeah, things will look pretty confusing.

BigWarning8696

I see fair valuation around $25 just to be fair market value based on P/E, PEG, P/S, P/B, cashflow. That's not necessarily a buy point. That's just a fair valuation based on its competitors/sector. I prefer buying lower than that or at least when I see an uptrend starting at those levels

Metaischeap

And around a 1.2-1.4 PEG depending on what forward data you wanna believe in it’s still expensive ahahahaha

TenFigureNetworth

PEG is at 0.6 bro its not gonna get any better than tha. It's growth is still at 50% while its PE is around 20 but you do you. I have full ported APPX (2x APP) at $295

itsalwayscalls

One has the lowest PEG ratio of nearly any tech stock.

Disastrous_Rent_6500

I’m a value investor, I don’t even care about P/e to be honest. If the PEG ratio doesn’t look good I’m not buying 😂

Creative_Strike8202

Sure there is a bubble with the lowest PEG ratio of the last 15 years and corporate profits proyected to grow 36% YoY. I bet that you will eventually be right when there is a correction that you misstimed for 5 years after missing one of the biggest opportunities of the century

TickTockTaudit

QQQ PEG ratio is bullish

Ddoubledidgits

I think META can easily hit 1k. PEG is still around 1 🔥

sherkhet

Have been accumulating a small position in $CMCO as well. last earnings were beat/raise. refinanced some of their debt and revolving facility. CFO bought shares along with another director. Now downside is rates are moving higher if they need to more debt or refi..and if synergies don't come through. Stock I think is less than 1 on the PEG ratio, and I think stock is trading below where it was at the last earnings call. Yes, lots of headwinds and other ratios that suggest stay away but if this mgmt team can deliver on synergies I'm think $40/share by 2028.

Not_Sure_68

I understand that, and agree that eventually that will be a major factor in corporate earnings...as well as a massive deflationary impulse in the overall economy. I use anthropic's AI in my own work and agree it increases productivity. ...and just like the dot com bubble investors get way way ahead of themselves. The amount of borrowing by AI buildout companies is quite literally competing with fed gov's ability to issue debt. This is driving up rates and that's going to lower those PEG ratios going forward. There is no mechanism in place to account for the massive increase in the time value of money in those estimates which will cause those earnings to disappear. This can be clearly seen in the rising cost of debt service associated with all the companies building out the AI infrastructure as well as their rapidly declining FCF.

Pitiful-Most7939

PE looks at the past. PEG looks to the future. I care less about what they have earned and more about the potential earnings down the line.

Herbisretired

I use Finviz screener and I try to find companies with a low PE and PEG that are fairly large with low debt that are in a solid growth industry. I haven't done it in awhile because I haven't freed up enough cash to invest

BigWarning8696

Dude, its Coke. Might hit $200 by 2040. Given its about 15% over-valued compared to its 5 year valuation with an awful PEG of 3.6, its much more likely to get back down to $70 where it belongs

sorunya

Does not look like fundamentals are holding this near 52W-Low: "This pet specialty retailer carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 26.3% over the last 60 days. (...) Petco Health has a PEG ratio of 0.87 compared with 2.14 for the industry. The company possesses a [**Growth Score** ](https://www.zacks.com/style-scores-education/)of B. " [https://www.zacks.com/commentary/2995549/best-growth-stocks-to-buy-for-september-25th](https://www.zacks.com/commentary/2995549/best-growth-stocks-to-buy-for-september-25th)

Kantmzk

A PEG of 3.21 is an even more glaring red flag for me that the valuation is out of whack.

Holiday_Movie178

Ummm If NVDA drops It wont be due to any of the things you mentioned here… Could be due to AI processing/ compute demand not continuing to be as strong causing revenues to shrink Could be due to inference and model Training becoming simpler and them there will be more competitive alternatives to their chips Could be due to circular AI economy collapsing and NVDA financing itself to a certain extent.. That being said, NVDA is currently priced very reasonably for the world’s highest valued company exhibiting incredible margins and growth. ~18x price to sales ratio and a ~14x forward P/E and a SUPER low PEG and they are making smart investments with all their capital.. so if you would ask me, no, they are not doomed and a lot of the above mentioned concerns are already priced in. I can share a tool I built that quickly gave me these analysis both qualitative and quantitative, DM if interested.

BigWarning8696

Fair market value based on valuation compared to sector average would be around $27 (based on PEG, forward P/E, P/S). Whether the "Nike" name itself would give a higher or lower valuation is up for debate

D_Pablo67

Let me make a clear distinction between a “bubble” like 2000, and a rotating group of individual stocks that have explosive price growth 2-3X and then drop 50% vs. an SK Hynix who’s stock price is up 7x over about a year and a half, but periodically pulls back 10-20%. Are we in an AI bubble? My conclusion is no. The semiconductor, memory, and data center construction companies have all report clear visibility into maximum capacity orders backlog through 2030. Smart tech analysts like Dan Ives, who follow all these companies closely, says demand is $13 for every dollar of supply. Next, take a company like Oracle. Runs up hard then drops in half? Bubble? No, this is a phenomenon of markets overshoot (read Nobel Prize economist Richard Thaler). Enough market sentiment shifted on Oracle saying they might not be the winner over other players as AI will kill us and take our water hysteria magnifies. Next, look at NVIDIA, each earnings report is a blowout, but the stock rises slowly with PE multiple contraction (14) compared to earnings growth. Think Peter Lynch who valued the PEG ratio (earnings growing faster than PE multiple). Lastly, I just watched a September 15, 2026 by tech investor Brad Gerstner saying the whole trade in the next few months rests on whether Anthropic hits its revenue targets, which they now publish as they approach a late year IPO. CONCLUSIONS: (1) Biggest investing mistakes would be avoid all AI related companies because you think it is a bubble. (2) Go all in on AI without regard to company quality and price, throwing portfolio diversification out the window. STRATEGY: I have large positions in CrowdStrike, NVIDIA, Broadcom, Arista Networks and SpaceX in the context of a broader portfolio. Earlier in the year I sold Amazon, Microsoft and Meta to cash out multi year gains as a risk management tool. You need to look at the individual and not make sweeping generalizations.

Careless-Place-170

I don't trust anything forward rn. neither forward PE or PEG or whatever

whatsgoingonhonestly

PEG ME NOT SPY :screech:

i_empathetic

PEG ratio was 0.35 this morning, it has literally never been cheaper on an earnings basis

BigWarning8696

I'd much rather own ONON. NKE has negative revenue growth next year, while ONON still growing at 15-20% rev and earnings with a lower forward P/E and a PEG of 0.6 vs NKE's 2.05

ShootsnLadders

I have been doing very similar for DCF, guidance cases, and comparison to competition. I find I use this prompt below over and over. Role: You are a Senior Financial Analyst specializing in Equity Research and Corporate Valuation. Your expertise lies in determining the intrinsic value of companies across diverse sectors using a variety of valuation frameworks. Objective: Provide a deep-dive valuation analysis and comparative study of $XXX against its industry peers. Core Competencies & Frameworks: • Discounted Cash Flow (DCF): Calculate FCFF or FCFE using a multi-stage growth model. Apply appropriate WACC calculations, including Beta unlevering/relevering and Equity Risk Premium (ERP) adjustments. • Relative Valuation: Perform a "Comps" analysis using P/E, EV/EBITDA, and Price/Sales multiples. Adjust for differences in growth (PEG ratio) and margin profiles. • Precedent Transactions: Analyze historical M&A deals to determine "control premiums" and exit multiples. • Sensitivity Analysis: Provide a "Football Field" chart summary showing how changes in terminal growth rates or discount rates affect the final valuation. Communication Style: • Candid and Objective: Don't just give a price target; explain the "why." Highlight risks (e.g., "The valuation is highly sensitive to the cost of debt"). • Professional Tone: Use industry-standard terminology (e.g., "Terminal Value," "Normalized Earnings," "Operating Leverage"). • Insightful Comparisons: When comparing companies, look beyond the numbers to qualitative factors like competitive moats and management quality. Task Instructions: 1. Analyze the provided financial data or ticker symbol. 2. Select the most appropriate valuation methodology for the specific industry. 3. Identify a peer group for relative comparison. 4. Provide a clear "Buy/Hold/Sell" sentiment based on the margin of safety between the current market price and your calculated intrinsic value. 5. Provide a bull case, base case, and bear case for the next 5 years on said stock.

_hiddenscout

I usually screen and do my own research, but do find it useful to ask some questions about a company. Usually i find it useful to do things like a DCF using last quarters results and guidance with a base, bear, and bull case. I ask about management track record and what headwinds/tailwinds a company has. What is their moat and competition. Also like to calculate the PEG and P/FCF using the latest numbers as well. I'm a GARPy investor, growth at responsible price, so my goal is try to find good companies at a good price to hold long term. I use screening to find the companies and dig into them, but I do like asking some of those questions to the LLM's to dig a bit deeper into the companies. You still need to verify everything the LLM's are telling you are true, but I do find it interesting to learn more about companies and industries as you are diving deep into the company.

BigWarning8696

Revenue projected to be negative growth next year. PEG of 1.9. If it wasn't a legacy stock it would be fairly valued in the low $20s

BigWarning8696

21 forward P/E with projected revenue growth of -1.69% and PEG of 1.92. What are you seeing that you like about NKE?

Bright_Mix_773

"Why not combine them into a single ranking" is a question with measured answers, and they were not the ones I expected. We run a four-component score on the S&P 500 (momentum, value, quality, growth), standardised and averaged, 186 monthly rebalances from 2011 to 2026 on point-in-time index membership. Four things fell out of testing the combination itself. **An arithmetic mean of standardised metrics does not weight them equally.** It weights them by their dispersion. In our data the standard deviations of the four z-scores are 0.97, 0.67, 0.63 and 0.58, so a recipe that says "25% each" is actually running 34.0 / 23.4 / 22.2 / 20.3. If you combine growth and a valuation multiple by any kind of averaging, whichever one has the fatter cross-sectional spread is quietly the dominant term. Worth computing before deciding the weights are wrong. **Making them genuinely equal came out worse.** Re-standardising each component so all four contribute the same amount: the monthly cross-sectional information coefficient goes from +0.0083 to +0.0062, paired t of -0.81 over 185 months, and on the 20-name book paired t -0.83. The accidental weighting beat the intended one. **Combining by ranks instead of magnitudes is clearly worse.** IC +0.0083 to +0.0026, paired t -2.06, p = 0.041. This is the direct answer to the Greenblatt part of your question: summing two rank positions throws away how far out a company actually is, and in a concentrated tail that distance is most of what you are selecting on. A ratio of two ratios does something similar, which is the complaint already made upthread about PEG - 40% growth at 8x and 10% at 2x are not the same bet, and the combined number cannot tell you which one you took. **A combined score partly works because it tolerates one bad component.** Requiring that no component sit below -0.5 cost 3.95 points of gross annual return over the same 186 rebalances; requiring none below -1.0 cost 0.08. Every screen you bolt on to make the composite "cleaner" removes the cases the composite existed to catch. The size of all this, so nobody reads more into it than is there: over those 186 rebalances none of our four components reaches t = 2 on its own (momentum +0.48%/month, t 0.92; quality -0.18%/month), and the combination gets +0.29%/month with t = 1.11. It beats its parts as measured, and fifteen years is not enough to call that demonstrated rather than observed. Counting criteria: monthly rebalances 2011-2026, point-in-time S&P 500 membership, IC is the monthly cross-sectional coefficient at a one-month horizon, every variant compared as a paired series against the live recipe rather than as two separate averages. Nothing above is about any particular company and I have not looked at the names in your chart.

Kantmzk

Back in June 2026, mi hear some Scottish Rasta guys a talk seh Vertex mek di man rich, an’ him woulda go hard pon it. Looking at di current financials, dem kinda back up di thesis too — PEG around 0.56, an’ forward P/E somewhere round 13 or so. Mi a think fi start build a position soon. Bumbaclaat, rasclaat — dis Rasta Scot mighta actually know weh him a talk ’bout finna take a large position from MSFT (currently own 342 shares) and put id on bumbaclaat Vertex

ConsiderationFit7681

Why would you contemplate selling your shares when SKHY is up 30% in less than a month and 8% today? SKHY has a P/E of 7.77 and a PEG ratio of .02. Those numbers suggest an undervalued company and attractive investiment IF other factors such as cyclicality, debt levels, future earnings estimates, profit margins, etc. are considered. Stocks are essentially a long game with MANY examples of short term wins if you pick the right stock. Buy what you know. Buy what's happening around you. Do you see AI becoming more dominant in practically every measure, not just here but around the world? I'd bet my next dividend check that AI has a toehold in the DPRK. Memory and storage plays should be balanced with investments in other sectors since money rotates in and out depending on macro events, institutional manipulation and retail sentiment. I just finished reading One Up on Wall Street by the immortal Peter Lynch. If you want to learn how to evaluate stocks and make informed investment decisions, this book should be at the top of your list.

dieharddubsfan

I think Broadcom is a name that most in the industry are already quite familiar with. Given they design custom chips for most of the big players, I think no doubt their business will do well as long as the AI infrastructure build-out continues. However, looking at the [fundamentals comparison table of AVGO and NVDA](https://www.stock-table.com/fundamentals?public_uuid=6e16b17d-bf31-4fcb-9c15-4110febd5300), NVDA is a better buy for me based on almost all the key value metrics, such as forward P/E, PEG, ROIC. However, both would be quite susceptible if the AI bubble bursts eventually.

i_empathetic

NVDA opened today with a 0.36 PEG ratio. Do you know how insane that is for a 5T company?

BabyQuesadilla

RDDT is transitioning from a growth stock to a mature stock. How often do we see multiples expand as a company gets older? APP has better growth figures with lower multiples. PINS has way lower multiples (9 fwd PE) and similar EPS growth expectations. Both have PEG of 0.4.

ptexpat

Given current price they are trading at a TTM PE (adjusted / non-GAAP) of \~53x. Expensive when seen standalone but TTM EPS growth ((adjusted / non-GAAP) was \~40% so a TTM PEG of \~1.3x is not that expensive. It comes down to whether they can sustain this level of earnings growth going forward. Based on their annual guide at the end of Q2, implied YoY adjusted EPS growth would be \~40%. So the forward PEG multiple seems reasonable.

AllRightLetsSeeIt

The market seems to be ***deeply*** skeptical, in fact. Their PEG ratio is like 0.29, historically quite low for them and much lower than the rest of the MAG7.

i_empathetic

Its PEG ratio is down to like 0.35 at this point. *Insane* value proposition, it only has been getting cheaper on an earnings basis for like 18 months straight. Doesn't matter apparently heh.

xtric8

Its not a bubble because 90% of people think its a bubble. They always use the Shiller p/e CAPE to prove their point. Issue with that is is shiller uses a combination of valuations including 10-year trailing p/e. So todays price over past 10 years earnings. If you use PEG ratio, you get opposite results because of present and future growth expectations. Now, maybe those expectations are too lofty? I don't know but current earnings growths are actually quite high

i_empathetic

NVDA PEG ratio is like 0.35 now, it literally has never been cheaper on an earnings growth basis. Bonkers.

AllRightLetsSeeIt

It’s all about the PEG ratio. Quick and current ratio too.

Namtabmal

Google still with forward PE of 17 and 0.93 PEG. What am I missing here? 4$ away from the 200 sma as well. Isnt this an obvious buy?

Capital-Pineapple961

How can the “perfect” price stay the same when the company keep growing? It is not priced to perfection, is it priced as to have sustancial risks attached. Whatever those risks still exist in full force we’ll have to see, but if they ever stop to exist or mitigate… this is not a price for NVDA at 0.3 PEG

STOPbuyingPUTS

The stock was kind of a no brainer buy going into the print. PE, PEG, and P/fcf valuations were all at decade lows; plus the year ago quarter was going to be an easy beat on YoY revenue growth. But of course hindsight is 20/20. Here’s to hopium that my Oct 16 $210 calls print. 🚀

BigWarning8696

And if they were valued at their 5 year average P/E and PEG, NVDA should already be close to $400. There's a lot of room to run

BigWarning8696

I think there's a pretty good chance it pops only because its valuation is much better than in the past. If it were at its 5 year average PE and PEG, the current price would be close to $400.

TranzitBusRouteB

How low would low will AVGO really go, 19 forward P/E and 0.40 PEG

W_Edwards_Deming

> This statement is incomplete. Over how long of a period do you have to beat something for a strategy to be successful? Arbitrary. A day trader can achieve success in seconds, a buy & holder may take a lifetime. You seem to prefer 10 years for reasons unknown. I simply looked at my data, saw I had beaten the market and wanted to discuss. This turned out to be the wrong place, for the most part. That said, one guy gave me some very useful advice regarding Earnings yield vs. the 10 year treasury bond. I am grateful to him. A few others were polite and some suggested ETFs, at least a couple of I am looking further into. >ARKK massively outperformed VTI over the single year of 2020 by a MASSIVE margin. Would you say ARKK is a successful investment strategy? Consider that VTI is now trading at 378 while ARKK is now 86. Buy low, sell high. I am not familiar with those but ideally one would have bought ARKK in 2019, sold it near its peak and bought VTI at its lowest and perhaps sell it today to buy ARKK. I keep an eye on the indicators to know what to do and when. >it only lasts a short amount of time before they underperformed Things go up and down but no need for the fatalism and ETF / Mutual fund only fanaticism. >so much research shows that most stock-picking strategies don't work out. Again, you seem to have your mind made up. My results don't matter to you and there isn't much reason for our interaction. >The perception of rudeness must come from some idea that people have to speak to you in a specific way to show deference or respect. This is the internet, no one knows anything about you and doesn't owe you any specific communication preferences that you may be accustomed to. I don't know if you grew up privileged and surrounded by money so people who knew that would bend over and talk to you in the way you're accustomed to, but this is not it. Hilarious. This is a 14yr old account and I grew up without indoor plumbing or electricity. Once upon a time Reddit was a place where in-depth evidence based discussion was the norm, and it still happens. Even in here with some. You seem to be trying that approach but without any open-mindedness about the OP. Instead you are longform telling me your pre-existing deterministic conclusion. No need for me for that, you can tell the next one the same, and likely will. >Go back to some point (preferably 10 years ago) in the past and make virtual stock purchases based on your criteria (it will be a different set of stocks). Then track how those stocks have done over the last 10 years compared to market index trackers. Where am I going to get all the data listed in the OP for a stock 10 years ago? I can get the stock price form 10 years ago but the ROC, PEG and etc? >Why would you say this to someone you know nothing about? Why would you lump an individual with a group? You mean like you suggesting I am a naive & privileged third-grader? You are saying the same thing most of the people in here have said, albeit longform. Are you suggesting I am misunderstanding your deterministic conclusion that ETFs are better and strategies such as are in the OP are a gamble near certain to fail? >back-testable My screen is of a variety of data. Where am I getting that level of detail from 10 years ago? Looking into it myself it appears I'd have to pay for something like Portfolio123? I that your suggestion?

W_Edwards_Deming

Good points, I agree PEG is more important than P/E. I care most about ROE, possibly least about dividends. They weren't ranked in order of import in the OP, but closer to the order they are in on my screener. When I first started out I focused on the highest dividends possible... and had a bad time. For earnings I have focused on EPS past five years, you think it important to look at the EPS and divide it by the price per share? For example REPX has an EPS of 5.44 and a price of 38.17 5.44/38.17=0.1425203039035892 10 year treasury yield is 4.736%

Disastrous_Rent_6500

Same, I have a Warren buffet “buy a great company when it is truly cheap” approach as well. I couldn’t invest any other way. Most people just fomo and coin flip into hot stock picks and think it’s “investing”. Since they assume everyone else is doing the same thing, they think outperformance is 100% luck. Opinion: I since I do think you’ll listen, I will try and actual give a critique. When It comes to actual PE ratio, you need to understand it doesn’t matter as much as you think. In most cases the PEG ratio just matters more in most cases. If the company is growing, a PEG ratio bellow 1 will tell you everything. Now when it comes to dividends you got the right idea comparing it to bond yields, but what truly matters is not the dividend yield but the “earnings yield” instead. Dividends are just a distribution of earnings. Horrible companies can have good dividends even with negative earnings. Always just compare Earnings yield and the 10 year bond to actually figure out if the stock is truly cheap. Most companies start buying back their stock when the earnings yield is well above the 10 year yield.

Cra_Sh10

0,5 forward PEG btw

W_Edwards_Deming

I didn't mention the PEG, which is great. ROE is my first metric and it fails. P/E is one of he highest I have seen, as with the P/FCF. No dividend, profit margin barely passes.