Mgic Investments (MTG) PEG Chart

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

The PEG Ratio chart for Mgic Investments (MTG) 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 MTG. (Real time data for subscribers only)

Mgic Investment MTG Trading Report

October 12, 2021

Mgic Investment MTG Trading Report

October 01, 2021

When Mgic Investment (MTG) Moves Investors should Listen

September 21, 2021

Mgic Investment MTG Trading Advice

September 11, 2021

Mgic Investment MTG Trading Advice

September 02, 2021

Mgic Investment (MTG) Trading Report

August 22, 2021

Mgic Investment (MTG) Trading Report

August 12, 2021

When Mgic Investment (MTG) Moves Investors should Listen

August 02, 2021

When Mgic Investment (MTG) Moves Investors should Listen

July 23, 2021

Mgic Investment MTG Trading Report

July 14, 2021

Mgic Investment MTG Trading Advice

July 04, 2021

How the price action of Mgic Investment (MTG) is used to our Advantage

June 24, 2021

Investment Analysis Mgic Investment MTG

June 15, 2021

Timing Trades in Mgic Investment MTG can be Risky if you Don't Have Discipline

June 05, 2021

How Stock Traders Daily uses Price Action in Mgic Investment MTG to Define Opportunity and Risk

May 26, 2021