PEG ratio screener: what the ratio needs and where it breaks

Three choices behind every PEG

Anyone computing a PEG has to pick a P/E (trailing or forward), a growth rate (an analyst forecast or the company's reported past) and a period for that rate, one year or several.

The textbook version uses a forecast. stocks-llm uses the trailing P/E and divides it by growth in diluted earnings per share taken from the company's SEC filings, as a compound annual rate over up to three fiscal years. Every figure carries a label with the span it was measured over, and no analyst estimate enters the calculation. The ratio therefore describes growth a company has already delivered.

For a company with steady earnings this works as intended. On the October 9 close, $AAPL traded at a P/E of 38.6 with diluted EPS growing 6.9% a year from fiscal 2022 to fiscal 2025, a PEG of 5.6. $MSFT traded at 29.8 times earnings on 22.9% a year from fiscal 2023 to fiscal 2026, a PEG of 1.3. In both cases the growth rate is built from several ordinary years, which is what the ratio assumes.

When the growth rate is an event

The formula has no way to tell a trend from a single event. stocks-llm sorts the events into four shapes, and each of them pushes the PEG toward zero.

The first is a hole. $INCY reported diluted EPS of $2.65 in 2023 and $0.15 in 2024, a year in which research and development expense included a $679.4 million charge for in-process research acquired with Escient Pharmaceuticals. In 2025 EPS came back to $6.41. Measured over that one year, growth was 4,173%, and a P/E of 14.4 divided by 4,173 gives a PEG of about 0.003.

The second is a one-off gain. $BYD earned $22.56 per share in 2025 against $6.19 in 2024, and its release says 2025 net income included a $1.4 billion after-tax gain on the sale of its stake in FanDuel. One-year growth was 264%. The same gain sits in the trailing earnings, so the P/E was 3.0. One event made the numerator smaller and the denominator larger, and the PEG came out near 0.01. On the company's adjusted basis, EPS was $7.40 against $6.55.

The third is a first profitable year. $LYFT lost money in 2021, 2022 and 2023, then earned $0.06 per share in 2024 and $6.81 in 2025. Its fourth-quarter 2025 net income of $2.8 billion included a benefit from releasing a tax valuation allowance. Growth from $0.06 to $6.81 is 11,250%.

The fourth is a base near zero. $NVDA reported diluted EPS of $0.17 in fiscal 2023 and $4.90 in fiscal 2026. That growth was real, and it compounds to 207% a year. Divided into a P/E of 35.1, it would give a PEG of about 0.17, among the ten lowest in the catalog. The 207% owes most of its size to how low fiscal 2023 was.

stocks-llm publishes no PEG in any of these four cases and records the reason on the company's row. On the October 9 close it published a PEG for 614 companies and withheld one from 787 others whose filings it holds: 361 for a hole year, 340 for a first profitable year, 56 for a one-off latest year and 30 for a near-zero base.

Cases that pass and still need a look

Any rule that withholds a number has an edge, and some companies land just on the published side of it. A PEG screen shows these rows like any other.

$TMUS had a published PEG of 0.23 on a three-year growth rate of 67.7%, from diluted EPS of $2.06 in 2022 to $9.72 in 2025. Its 2022 annual report shows merger-related costs, net of tax, of $3.7 billion for that year, part of integrating Sprint. The years on either side of 2022 were $2.41 and $6.93. The product treats a year as a hole when it comes in under half the level its neighbours bracket, and 2022 came in at 0.504 of that level. Over the last two years EPS went from $9.66 to $9.72.

$THC had a published PEG of 0.17 on a three-year rate of 59.9%, from $3.79 in 2022 to $15.49 in 2025. In between, 2024 diluted EPS was $32.70, including an after-tax gain of $21.89 per share that came mainly from hospital sales. The P/E of 10.2 carries one-time items as well: $THC reported first-half 2026 earnings of $17.81 per diluted share, while its adjusted figure, which leaves out items the company does not treat as ongoing, was $10.91.

The two lowest PEGs in the catalog belong to $SLDE at 0.06 and $AII at 0.07, both property and casualty insurers on a P/E of 6.1. The catalog holds two fiscal years of EPS for each, so each growth rate covers a single year: 102% for $SLDE and 92% for $AII. A single year is the thinnest base a growth rate can have, and the label on both rows says "1-year EPS growth".

How to read a PEG screen

Read the span label before the ratio. A three-year rate has more years behind it than a one-year rate, and a one-year rate near the top of the list deserves the closest look.

Then open the EPS years behind the rate. Check whether the base year sits well below the years around it, and whether one year in the middle stands far above the rest. Either shape can set the rate on its own.

Check whether the P/E is low for the same reason the growth is high. A gain that lands in trailing earnings does both. Most earnings releases print an adjusted figure next to the reported one, and a wide gap between the two is the place to start.

A low PEG says the multiple is low against the growth the company has already delivered. Whether that growth repeats is a separate question, and the lowest rows on a PEG screen are the first ones to check for a single unusual year.

How stocks-llm helps

The PEG ratio page in the stocks-llm glossary explains how the product derives its PEG and when it withholds one, and lists the lowest published ratios in the catalog with the span each was measured over.

This article is for information only and is not financial or investment advice. Verify material figures against the company's filings before making an investment decision.