As far as I know, if you're buying a stock with a PEG ratio less than 1, then it's a good valuation of that stock.

But I don't have any idea what a negative PEG indicates. Is it bad or very bad?

Here are many stocks that have a negative PEG ratio.


a negative PEG (Price to Earnings Growth) ratio can mean one of two things: either the company's current earnings are negative, or its expected earnings growth rate is negative. Neither are desirable outcomes.

If a company's current earnings are negative, you should assess whether this is a short-term problem (e.g. brought about by one-off impairment or restructuring charges) or the sign of structural problems.

The same rules apply when it comes to assessing a company's expected earnings growth rate. However, it is fair to say that negative expected growth rates are usually a "red flag".

It also helps to compare a company's PEG ratio against that of its peers, to put a company's ratio in context.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.