And some former high-flyers still have PEGs well above average. In slowing economic environments, you'll find growth slowing and even if stock prices fall, the slowdown is so strong that the PEG expands. There's no hard and fast rule but historically the average PEG is around 1.5. Many small caps are trading at less than 1. Many large cap stocks, even non-techs, are trading at PEGs of 2.5 and more.
PEGs are a quick way to compare valuations.
Although we have had drastic pullbacks in many large caps, current earnings and future growth rates have come down even faster. This yields a PEG of 5. That means a PEG of 2. Direct Focus 52-week stock performance Among smaller companies, you can often find overlooked opportunities. Because they are smaller, many have fewer shares outstanding that can somewhat limit institutional ownership, which often boosts prices of large caps.