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A Capital-Structure Neutral PEG Ratio Alternative, EV/EBITDA to EBITDA Growth

The PEG ratio is used to screen stocks by comparing the P/E ratio to income growth, but it is affected by the capital structure of the company. The EV/EBITDA ratio is used as an alternative to the P/E ratio that is capital-structure neutral. This algorithm calculates year-over-year EBITDA growth so the EV/EBITDA to EBITDA growth ratio can be used instead of the PEG ratio, creating a capital-structure neutral metric that compares valuation to earnings growth.

The version of the EV/EBITDA to EBITDA growth ratio here uses trailing EBITDA growth. PEG ratio calculations can also use the forward PEG ratio, which requires an earnings projection from the company or third-party analysts. The PEG ratio available under fundamental metrics uses the forward P/E ratio divided by the long-term average earnings growth rate. I didn't see forward EBITDA or projected EBITDA growth listed under fundamental metrics but it might be available from Morningstar or other financial sites.

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Backtest from to with initial capital
Total Returns
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Alpha
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Beta
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Sharpe
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Sortino
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Max Drawdown
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Benchmark Returns
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Volatility
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Returns 1 Month 3 Month 6 Month 12 Month
Alpha 1 Month 3 Month 6 Month 12 Month
Beta 1 Month 3 Month 6 Month 12 Month
Sharpe 1 Month 3 Month 6 Month 12 Month
Sortino 1 Month 3 Month 6 Month 12 Month
Volatility 1 Month 3 Month 6 Month 12 Month
Max Drawdown 1 Month 3 Month 6 Month 12 Month
# Backtest ID: 5937afc4a8fa426f09da451a
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