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AutoZone Inc (NYSE:AZO)
Peter Lynch Fair Value
$647.70 (As of Today)

Peter Lynch Fair Value applies to growing companies. The ideal range for the growth rate is between 10 - 20% a year. Peter Lynch thinks that the fair P/E value for a growth company equals its growth rate, that is PEG = 1. The earnings here is trailing twelve month (TTM) earnings. The growth rate we use is the average growth rate for earnings per share over the past 5 years. If 5-Year Earnings Growth Rate is greater than 25% a year, we use 25.

Here, as of today, AutoZone Inc's PEG is 1. AutoZone Inc's 5-Year EBITDA Growth Rate is 20.4. AutoZone Inc's Earnings Per Share without Non-Recurring Items (NRI) for the trailing twelve months (TTM) ended in Aug. 2014 was $31.75. Therefore, the Peter Lynch Fair Value for today is $647.70.

As of today, AutoZone Inc's share price is $581.25. AutoZone Inc's Peter Lynch fair value is $647.70. Therefore, AutoZone Inc's Price to Peter Lynch Fair Value Ratio for today is 0.90.

AZO' s 10-Year Price to Peter Lynch Fair Value Range
Min: 0.46   Max: 1.51
Current: 0.88

0.46
1.51

During the past 13 years, the highest Price to Peter Lynch Fair Value Ratio of AutoZone Inc was 1.51. The lowest was 0.46. And the median was 0.75.

AZO's Price to Peter Lynch Fair Value is ranked higher than
94% of the 1357 Companies
in the Global Specialty Retail industry.

( Industry Median: 9999.00 vs. AZO: 0.88 )

Note: Please don't confuse Peter Lynch Fair Value with the value reached in Peter Lynch Chart.


Definition

AutoZone Inc's Peter Lynch Fair Value for today is calculated as

Peter Lynch Fair Value=PEG*5-Year EBITDA Growth Rate*Earnings Per Share (NRI) (TTM)
=1*20.4*31.75
=647.70

AutoZone Inc's Earnings Per Share (NRI) for the trailing twelve months (TTM) ended in Aug. 2014 was 6.29 (Nov. 2013 ) + 5.63 (Feb. 2014 ) + 8.46 (May. 2014 ) + 11.37 (Aug. 2014 ) = $31.75.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

If 5-Year Earnings Growth Rate is greater than 25% a year, we use 25.

Please note that we use the 5-year average growth rate of EBITDA per share as the growth rate. EBITDA growth is subject to less manipulations than net earnings per share. In the calculation, PEG=1 because Peter Lynch thinks that the fair P/E ratio of the growth stock is equal to its earnings growth rate.


Explanation

Peter Lynch Fair Value applies to growing companies. The ideal range for the growth rate is between 10 - 20% a year.

Peter Lynch thinks that the fair P/E value for a growth company equals its growth rate, that is PEG = 1. The earnings here is trailing twelve month (TTM) earnings. The growth rate we use is the average growth rate for earnings per share over the past 5 years.

Please don't confuse Peter Lynch Fair Value with the value reached in Peter Lynch Chart. In Peter Lynch chart, a fixed P/E ratio of 15 is used to draw the Earnings Line. Therefore the value reached has a P/E ratio of 15. But in Peter Lynch Fair Value calculation, P/E equals to the growth rate of EBITDA over the past 5 years, which is 20.4 instead of 15 in this case.

AutoZone Inc's Price to Peter Lynch Fair Value Ratio for today is calculated as

Price to Peter Lynch Fair Value=Share Price/Peter Lynch Fair Value
=581.25/647.70
=0.90

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Earnings Per Share (NRI), peg, Median P/S Value, Intrinsic Value (DCF Projected), Intrinsic Value (DCF), Intrinsic Value (DE), Graham Number


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

AutoZone Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
lynchvalue 180.75178.74122.92126.91164.44263.11412.68557.67649.70647.70

AutoZone Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
lynchvalue 516.98557.67580.48593.21608.35649.70655.41652.43654.77647.70
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