SHOP PEG Ratio Analysis

The PEG ratio divides a stock’s price-to-earnings (P/E) multiple by its expected earnings growth rate, so a value of 1.17x means the price paid for each dollar of earnings is roughly in line with the projected growth — generally considered fairly valued.

For context, the sector median PEG is 0.81x, and this stock sits at the 59th percentile among peers, meaning it is more expensive relative to growth than most comparable companies. The metric has been decreasing over the last 8 quarters, with the latest reading of 1.17x down sharply from 7.51x and 7.54x in prior periods; the quarter-over-quarter change is -84.4%, while the year-over-year change is not available. This combination — a falling PEG from a very high level to near the sector median — signals that the market’s growth expectations have been reset, reducing the previous valuation risk and potentially improving the risk/reward profile. That said, being above the sector median still leaves some premium relative to peers. This metric broadly supports the overall BULLISH verdict, because the steep decline in PEG points to a valuation that has become far more reasonable while growth prospects remain intact.

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