- (0:30) - How To Use The PEG Ratio To Find Strong Value Investments
- (4:45) - Tracey’s Top Stock Picks
- (18:40) - Episode Roundup: SKIL, PINS, MU
- [email protected]
Welcome to Episode #417 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
With growth stocks still moving higher in 2025, value investors can feel left out. But the good news is, they don’t need to because they can use the PEG ratio to find stocks that have both growth AND value.
Screening with the PEG Ratio
The PEG ratio was first used by famed value investor Benjamin Graham, who was the boss and mentor of Warren Buffett.
The PEG ratio is available on most financial websites these days, but if you must figure it out yourself, it is the price-to-earnings (P/E) divided by the growth. A PEG ratio under 1.0 means a company has both value and growth.
Tracey ran a PEG screen which is one of Zacks Premium screens. It looks for a PEG ratio under 1.0.
The stock must also have closed above $5 and have an average broker recommendation of 2.5 or less. A 1 is a Strong Buy.
And, of course, the screen includes the top Zacks Ranks of #1 (Strong Buy) or #2 (Buy).
This screen returned 17 stocks.
3 Stocks with Low PEG Ratios for Your Watch List
1. Skillsoft Corp. (SKIL)
Skillsoft describes itself on its website as the “first AI-native skills intelligence platform built for the human + AI era.” In September, it launched the Skillsoft Percipio Platform, an all-in-one platform to manage workforce capability.
Skillsoft is a small cap company, with a market cap of $133 million. It’s one of the rare AI small cap companies. It’s also a Zacks Rank #1 (Strong Buy) stock.
However, shares of Skillsoft are down 36.1% year-to-date. Earnings are expected to decline in fiscal 2026 by 19.6% but jump 48% in fiscal 2027.
It’s cheap. Skillsoft has a forward price-to-earnings (P/E) ratio of just 4.4. A P/E ratio under 10 is considered to be dirt cheap. It also has a PEG ratio under 1.0.
Should Skillsoft be on your watch list?
2. Pinterest, Inc. (PINS)
Pinterest is a social media platform with a market cap of $21.7 billion. In the second quarter of 2025, monthly active users were higher, year-over-year to 578 million from 522 million in 2024. Thanks to AI, revenue was also higher.
But shares of Pinterest have lagged this year even with the growth in the business. It’s up 9.9% year-to-date, which is under performing the S&P 500 at 14.7%.
Earnings are expected to jump 33.3% in 2025 and another 22.1% in 2026. It has a PEG ratio of just 0.5. Pinterest also has an attractive P/E ratio of 18.4.
Pinterest is a Zacks Rank #2 (Buy).
Should Pinterest be on your watch list?
3. Micron Technology, Inc. (MU)
Micron is a memory and storage company. Earnings have soared thanks to the AI revolution. In fiscal 2025 earnings jumped 537.7%. Revenue was a record at $37.4 billion, up from $25.1 billion the prior year.
But this growth is not over yet. In fiscal 2026, earnings are expected to jump another 100%.
With all this good news, shares of Micro have soared 128.5% in 2025. Yet it’s still cheap. Micron trades with a forward P/E of just 11.9. A P/E under 15 is considered a value stock. It also has a PEG ratio of just 0.4.
With the data center business red-hot, should Micron be on your watch list?
What Else Should You Know About the PEG Ratio?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of PINS in Zacks Value Investor portfolio.]
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Micron Technology, Inc. (MU): Free Stock Analysis Report Pinterest, Inc. (PINS): Free Stock Analysis Report Skillsoft Corp. (SKIL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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