Alaska Air Group (ALK) PEG Chart

What is the Price to Earnings Growth (PEG) Ratio?

The PEG Ratio chart for Alaska Air Group (ALK) compares PE to EPS Growth rates.

Defining fair value is the goal of measuring valuation using the PEG Ratio. The PEG ratio compares the PE Ratio to the EPS Growth rate of a stock to help estimate how many years of earnings growth would be required to reach the current valuation of that stock at a particular time.

Stocks are priced using a forward-looking model, the stock market is a forward-looking indicator, and the PEG ratio helps define how far ahead investors in a particular stock are looking based on its EPS growth rate. Companies growing EPS faster will have a lower PEG ratio if their PE multiples are equivalent, but often companies that are growing faster often have higher PE multiples, and equivalent PEG Ratios.

PEG Ratios help us define valuation for companies growing EPS at various rates by allowing us to compare them with a more equivalent measure. PEG Ratios are considered more valuable than PE Ratios because they account for EPS Growth rates and offer better comps than PE alone.

PEG ratios are attractive because we can use them to compare companies that are growing at different rates and they help us determine fair value across different sectors and industries.

However, PEG ratios can also be somewhat misleading when they incorporate forward looking expectations of analysts that extend beyond the next 12 months. We have determined that forward expectations of analysts are reliable about 12 months out, but beyond that they are far less reliable and therefore PEG ratios that are based on growth expectations far into the future should be taken with a grain of salt.

Preferably, we use trailing 12 month PEG ratios because those allow us to see where PEG ratios have been in the past based on trailing 12 month earnings trends and that gives us an indication of where the best times to buy or sell that stock might be. For example, we might find that the best time to buy a particular stock is when it's trailing 12 month PEG ratio is at an extreme level, and we can identify that using our trailing 12 month PEG ratio chart and then anticipate making an investment when we see the PEG ratio for that stock approach our target range again.

PUBLIC TRADING ACHIVES FOR ALK. (Real time data for subscribers only)

How To Trade Alaska Air Group ALK

July 29, 2021

How To Trade Alaska Air Group ALK

July 19, 2021

Alaska Air Group ALK Technical Analysis

July 10, 2021

Trend Tracker for Alaska Air Group ALK

June 30, 2021

Alaska Air Group ALK Buy and Sell Signals

June 20, 2021

Trading Report for Alaska Air Group ALK With Buy and Sell Signals

June 11, 2021

How to use Alaska Air Group ALK as a Forecasting Tool

June 01, 2021

Sometimes Stocks Move Fast, and Alaska Air Group ALK is no Exception

May 22, 2021

Why Investors in Alaska Air Group #ALK Consider Price Action to be a Tell

May 12, 2021

How to Develop Investment Plans for Alaska Air Group #ALK

May 02, 2021

How to Evaluate Alaska Air Group $ALK by Looking at the Charts

April 21, 2021

Stimulus Matters to the Stock Market and to Alaska Air Group $ALK

April 11, 2021

Why the Technicals for Alaska Air Group $ALK can be More Revealing than the Fundamentals

April 02, 2021

What Alaska Air Group $ALK is Telling us About its Future

March 24, 2021

Using the Action in Alaska Air Group $ALK to our Advantage

March 14, 2021