Switch to:
Dick's Sporting Goods Inc (NYSE:DKS)
Peter Lynch Fair Value
$66.17 (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, Dick's Sporting Goods Inc's PEG is 1. Dick's Sporting Goods Inc's 5-Year EBITDA Growth Rate is 24.97. Dick's Sporting Goods Inc's Earnings Per Share without Non-Recurring Items (NRI) for the trailing twelve months (TTM) ended in Jul. 2014 was $2.65. Therefore, the Peter Lynch Fair Value for today is $66.17.

As of today, Dick's Sporting Goods Inc's share price is $44.24. Dick's Sporting Goods Inc's Peter Lynch fair value is $66.17. Therefore, Dick's Sporting Goods Inc's Price to Peter Lynch Fair Value Ratio for today is 0.67.

DKS' s 10-Year Price to Peter Lynch Fair Value Range
Min: 0.51   Max: 3.8
Current: 0.7

0.51
3.8

During the past 13 years, the highest Price to Peter Lynch Fair Value Ratio of Dick's Sporting Goods Inc was 3.80. The lowest was 0.51. And the median was 0.96.

DKS's Price to Peter Lynch Fair Value is ranked higher than
95% of the 1210 Companies
in the Global Specialty Retail industry.

( Industry Median: 9999.00 vs. DKS: 0.70 )

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


Definition

Dick's Sporting Goods 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*24.97*2.65
=66.17

Dick's Sporting Goods Inc's Earnings Per Share (NRI) for the trailing twelve months (TTM) ended in Jul. 2014 was 0.4 (Oct. 2013 ) + 1.11 (Jan. 2014 ) + 0.57 (Apr. 2014 ) + 0.57 (Jul. 2014 ) = $2.65.

* 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 24.97 instead of 15 in this case.

Dick's Sporting Goods 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
=44.24/66.17
=0.67

* 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.

Dick's Sporting Goods Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
lynchvalue 0.000.000.0033.00-6.8613.3813.4624.9557.7567.50

Dick's Sporting Goods Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
lynchvalue 35.7142.5954.0057.7559.5065.5065.5067.5068.7566.17
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK