Peter Lynch Fair Value is calculated as follows:
Peter Lynch Fair Value = PEG
* 5-Year EBITDA Growth Rate
* Earnings per Share
If 5-Year Earnings Growth Rate is greater than 20% a year, we use 20.
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.
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.
Earnings per Share
, 5-Year Earnings Growth Rate
, Median P/S Value
, Intrinsic Value (DCF Projected)
, Intrinsic Value (DCF)
, Intrinsic Value (DE)
, Graham Number* All numbers are in millions except for per share data
Forestar Group, Inc. Annual Data
Forestar Group, Inc. Quarterly Data