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Dell Inc (NAS:DELL)
Peter Lynch Fair Value
\$5.80 (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. If 5-Year Earnings Growth Rate is smaller than 5% a year, we do not calculate Peter Lynch Fair Value.

Here, as of today, Dell Inc's PEG is 1. Dell Inc's 5-Year EBITDA Growth Rate is 7.6. Dell Inc's Earnings Per Share without Non-Recurring Items (NRI) for the trailing twelve months (TTM) ended in Jul. 2013 was \$0.76. Therefore, the Peter Lynch Fair Value for today is \$5.80.

As of today, Dell Inc's share price is \$13.86. Dell Inc's Peter Lynch fair value is \$5.80. Therefore, Dell Inc's Price to Peter Lynch Fair Value Ratio for today is 2.39.

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

Definition

Dell 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 * 7.6 * 0.763 = 5.80

Dell Inc's Earnings Per Share (NRI) for the trailing twelve months (TTM) ended in Jul. 2013 was 0.27 (Oct. 2012 ) + 0.303 (Jan. 2013 ) + 0.07 (Apr. 2013 ) + 0.12 (Jul. 2013 ) = \$0.76.

* 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.

If 5-Year Earnings Growth Rate is smaller than 5% a year, we do not calculate Peter Lynch Fair Value.

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 7.6 instead of 15 in this case.

Dell 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 = 13.86 / 5.80 = 2.39

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

Related Terms

Historical Data

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

Dell Inc Annual Data

 Jan04 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 lynchvalue 8.65 18.99 34.95 18.24 7.57 7.79 N/A N/A 18.93 15.15

Dell Inc Quarterly Data

 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 lynchvalue N/A 11.74 16.99 18.93 18.66 19.36 16.94 15.15 10.78 6.20
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