VALUATION · STRESS TEST

PEG Buy-In Calculator

A disciplined entry screen for my long-term investing: earnings revisions, growth, and a margin for forecast error.

My buying strategy

I consider buying only when EPS revisions are positive and the original PEG is below 1. Because PEG is sensitive to earnings forecasts, I then reduce next-year forecast EPS by 10% and require the stressed PEG to remain below 1.2. Otherwise, I wait.

Forward P/E uses the current-year forecast EPS. The stress test changes only next-year EPS, so current-year EPS and Forward P/E stay unchanged. Both growth rates must be positive, and every threshold is strict: equality does not pass.

Forecast inputs

Use the same currency as EPS. Must be greater than zero.

Forecast earnings per share for the current year. Must be positive.

Forecast earnings per share for the following year.

An independent forecast-revision measure. Enter 5 for +5%; use a consistent source and comparison period.

My default stress scenario is 10%. Adjustable from 0 to 100%.

Live results

Waiting for inputs

Complete all fields to see the calculation.

Forward P/E
—
Price ÷ current-year EPS
Original EPS growth
—
Next year versus current year
Original PEG · < 1
—
P/E ÷ growth in percentage points
Stressed PEG · < 1.2
—
Forward P/E remains unchanged
Stressed next-year EPS
—
Haircut applied only to next year
Stressed EPS growth
—
Must remain positive
Price ceiling · price must be strictly below—

The ceiling appears once all inputs are valid.

Formulas & interpretation

Forward P/E = Price / Current-year EPS

Growth = (Next-year EPS / Current-year EPS − 1) × 100

PEG = Forward P/E / Growth
A growth rate of 20% uses 20, not 0.2, in the PEG denominator.

Stressed EPS = Next-year EPS × (1 − Haircut / 100)

Stressed growth = (Stressed EPS / Current-year EPS − 1) × 100

Stressed PEG = Forward P/E / Stressed growth

Price ceiling = min(Current-year EPS × Growth, Current-year EPS × Stressed growth × 1.2)

The ceiling is a valuation boundary, not a price target or an inclusive maximum buying price. It applies only when both growth rates and EPS revision are positive. PEG is not a valid buying signal with zero or negative growth.

EPS revision is a separate filter, not an additional adjustment applied to the EPS inputs. All decisions use unrounded values. Changing the haircut explores alternative scenarios; 10% is my default rule.

This calculator implements my personal screening rules, not a guarantee of returns or a recommendation to buy. Forecasts can be wrong; business quality, debt, concentration, and risk still matter. No live market data is included. Calculations run in your browser, and this tool does not submit your inputs. Currency follows your inputs.

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