PE ratio relative to earnings growth — is the valuation justified?
1.46
PEG Ratio
1.46
Growth Rate Source
Limited Data Quality3-Year EPS CAGR
Current Price
$850.06
TTM EPS
$38.47
P/E Ratio
22.10
Growth Rate
15.2%
3-Year EPS CAGR
Sector
Healthcare
Medical - Distribution
Calculated
7/28/2026
7:30:28 PM
Peer Comparison
Sample Size
2 peers
Industry Median PEG
3.90
25th Percentile
0.41
75th Percentile
7.39
MCK PEG (1.46) vs Industry Median (3.90): 63% discount
Symbol
Company
PEG
P/E
Growth
vs MCK
CAH
Cardinal Health, Inc.
0.41
35.1
86.2%
-72%
HSIC
Henry Schein, Inc.
7.39
23.1
3.1%
+408%
How to Interpret PEG Ratio
PEG < 1.0 — Potentially Undervalued. The stock may be priced below its earnings growth rate, suggesting a potential buying opportunity.
PEG 1.0–2.0 — Fairly Valued. The stock price is roughly in line with its earnings growth. A PEG of 1.0 is often considered "fair value."
PEG > 2.0 — Potentially Overvalued. The stock may be priced above what its earnings growth justifies.
Limitations:PEG ratios are less reliable for financial firms (earnings driven by interest margins), companies with negative/zero earnings growth, and hypergrowth companies (>100% growth) where the ratio may appear misleadingly low. Always use PEG alongside other valuation metrics.
