Valuation check: TLF's PEG ratio is 8.91, above the Consumer Staples sector average of 4.03.
Get informed when a big investor buys or sells
+ Follow8.91
The PEG ratio measures a stock's valuation relative to its earnings growth rate. A PEG ratio below 1.0 may indicate that the stock is undervalued relative to its growth potential.
Tandy Leather Factory posts a PEG ratio of 8.91. That is above the Consumer Staples sector average of 4.03. Comparing that reading with peers and prior periods is usually more useful than looking at the number in isolation.
For Consumer Staples stocks, a PEG ratio near 4.03 is typical. Tandy Leather Factory's 8.91 is higher that level. That is roughly 121.0% above the sector mean. Whether that is a warning or an opportunity depends on growth outlook and other fundamentals shown elsewhere on Stockcircle.
Tandy Leather Factory's PEG ratio of 8.91 comes from dividing a price-based measure by a related financial statistic. Changes can come from the stock price moving, the underlying fundamental shifting, or both. Track both the level and the trend — a rising multiple on falling fundamentals is a different story than a rising multiple on rising earnings.
Context for TLF's PEG ratio usually means three checks: (1) trend versus prior periods, (2) level versus peers (average 4.03), and (3) consistency with growth and profitability. This page covers the first two; Tandy Leather Factory's other metric pages and overview cover the third.
Judging Tandy Leather Factory against Consumer Staples peers is usually better than using a market-wide rule of thumb. Business models inside Consumer Staples are more comparable, which makes gaps in PEG ratio easier to interpret. Start with 8.91 here, then scan peer and history charts to see if the gap is persistent.