ELI5: Explain Like I'm 5

PEG ratio

PEG ratio stands for Price/Earnings to Growth ratio. It is used to measure how fast a company might grow in the future. It is calculated by dividing the stock's price by the company's expected earnings growth rate. It helps investors compare different stocks and decide if they think a stock will grow quickly or slowly. For example, if a stock has a low PEG ratio (less than 1), it means it is expected to grow faster than the average stock, so it might be a good investment.