PEG ratio

Price to earnings divided by the expected earnings growth rate in percentage points. A company on 28 times growing at 22% has a PEG of 1.27.

The rule of thumb that one is fair value has no theoretical basis. It ignores the cost of capital entirely, ignores how long the growth lasts, and ignores what return the growth is earned at, which is the variable that decides whether growth is worth anything.

Two companies both growing 20% with the same multiple can be worth very different amounts if one reinvests at 30% and the other at 10%.

Treat it as a screening shorthand, not as a valuation.