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Airgas Inc  (NYSE:ARG) Peter Lynch Fair Value: $35.88 (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, Airgas Inc's PEG is 1. Airgas Inc's 5-Year EBITDA Growth Rate is 7.92. Airgas Inc's EPS without NRI for the trailing twelve months (TTM) ended in Mar. 2016 was $4.53. Therefore, the Peter Lynch Fair Value for today is $35.88.

As of today, Airgas Inc's share price is $142.95. Airgas Inc's Peter Lynch fair value is $35.88. Therefore, Airgas Inc's Price to Peter Lynch Fair Value Ratio for today is 3.98.




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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Airgas Inc Annual Data

Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16
Peter Lynch Fair Value Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 30.28 30.89 53.12 62.84 35.88

Airgas Inc Quarterly Data

Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16
Peter Lynch Fair Value Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 62.84 58.03 52.91 44.03 35.88

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

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

Peter Lynch Fair Value=PEG Ratio*5-Year EBITDA Growth Rate*EPS without NRI (TTM)
=1* 7.92 *4.53
=35.88

Airgas Inc's EPS without NRI for the trailing twelve months (TTM) ended in Mar. 2016 was (Jun. 2015 ) + (Sep. 2015 ) + (Dec. 2015 ) + (Mar. 2016 ) = $4.53.


* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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 7.92 instead of 15 in this case.

Airgas 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
=142.95/35.88
=3.98

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


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