Value stocks are more likely to have a PEG ratio ________.

Question

Quizplus · Accepted Answer

Value stocks are typically seen as undervalued by the market, which means their prices may not reflect their true potential for growth. As a result, value stocks tend to have a PEG ratio of less than 1, indicating that their price-to-earnings ratio is relatively low compared to their projected growth rate. A PEG ratio equal to 1 could indicate a fairly valued stock, while a PEG ratio greater than 1 could indicate an overvalued stock. A PEG ratio less than zero is not a meaningful metric.

Value Stocks Are More Likely to Have a PEG Ratio