When does PEG not matter?

[Sarge85]

At what Market Cap does coming up with a PEG ratio become irrelevant. I understand as a market cap gets larger, the PEG has less relevance.

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[DesertCat]

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At what Market Cap does coming up with a PEG ratio become irrelevant. I understand as a market cap gets larger, the PEG has less relevance.

Sarge/images/graemlins/diamond.gif

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Who told you that? When you buy a stock, you are basically paying for the (discounted) stream of cash it will produce. How fast it grows earnings will normally have a huge affect on that stream of cash. You simply can't ignore earnings growth.

Now the PEG ratio is an extremely simplistic tool that's not useful for calculating valuation. What it is useful for is as a quick rule of thumb to see whether the stock is attractive enough to spend time researching it.

So, I'd say PEG is never "irrelevant", unless a valuation is based on net asset value, which is an exception that almost never applies to larger cap stocks.

[buffett]

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At what Market Cap does coming up with a PEG ratio become irrelevant

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My personal opinion: anything over 0. PEG is a crutch.