PE ratio relative to earnings growth — is the valuation justified?
1.63
PEG Ratio
1.63
Growth Rate Source
Good Data Quality5-Year EPS CAGR
Current Price
$505.06
TTM EPS
$17.95
P/E Ratio
28.14
Growth Rate
17.3%
5-Year EPS CAGR
Sector
Technology
Software - Application
Calculated
8/28/2026
5:01:55 PM
Peer Comparison
Sample Size
2 peers
Industry Median PEG
2.99
25th Percentile
0.70
75th Percentile
5.29
MSFT PEG (1.63) vs Industry Median (2.99): 46% discount
Symbol
Company
PEG
P/E
Growth
vs MSFT
PLTR
Palantir Technologies Inc.
0.70
158.9
228.6%
-57%
ORCL
ORACLE CORP
5.29
26.1
4.9%
+224%
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.
