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Technology Stocks : Artificial Intelligence, Robotics, Chat bots - ChatGPT
NVDA 180.99+3.9%Dec 19 9:30 AM EST
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To: Elroy who wrote (5466)10/30/2025 8:03:42 PM
From: Frank Sully   of 5554
 
Elroy,

While agree that the exact values of a five-year forecast, whether for a small cap like KRKNF or a megacap like NVIDIA, are not reliable, me thinks growth trends are self-perpetuating. Thus for NVIDIA with 20 year CAGF of 40%, I believe consensus EPS GAGR of 37%. Similarly for KRKNF with hisotical 5 year CAGR of 44%, I believe a forecast CAGR of 30%. The one year forward P/E is not so difficult to estimate, giving 29 for NVIDIA and only 15 for KRKNF. Thus NVIDIA has a compelling PEG of 0.78 and a dirt cheap PEG for KRKNF od 0.5. I at least find such estimates to be useful investing tools. Peter Lynch was a big fan of the PEG.

<<< The 'PEG ratio' (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth.

In general, the P/E ratio is higher for a company with a higher growth rate. Thus, using just the P/E ratio would make high-growth companies appear overvalued relative to others. It is assumed that by dividing the P/E ratio by the earnings growth rate, the resulting ratio is better for comparing companies with different growth rates.

The PEG ratio is considered to be a convenient approximation. It was originally developed by Mario Farina who wrote about it in his 1969 Book, A Beginner's Guide To Successful Investing In The Stock Market. It was later popularized by Peter Lynch, who wrote in his 1989 book One Up on Wall Street that "The P/E ratio of any company that's fairly priced will equal its growth rate", i.e., a fairly valued company will have its PEG equal to 1. The formula can be supported theoretically by reference to the Sum of perpetuities method. >>>

(From Wikipedia)
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