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Costco Wholesale Corp  (NAS:COST) Peter Lynch Fair Value: $65.13 (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, Costco Wholesale Corp's PEG is 1. Costco Wholesale Corp's 5-Year EBITDA Growth Rate is 8.35. Costco Wholesale Corp's EPS without NRI for the trailing twelve months (TTM) ended in Feb. 2019 was $7.80. Therefore, the Peter Lynch Fair Value for today is $65.13.

As of today, Costco Wholesale Corp's share price is $248.35. Costco Wholesale Corp's Peter Lynch fair value is $65.13. Therefore, Costco Wholesale Corp's Price to Peter Lynch Fair Value Ratio for today is 3.81.


NAS:COST' s Price-to-Peter-Lynch-Fair-Value Range Over the Past 10 Years
Min: 0.6   Max: 4.24
Current: 3.81

0.6
4.24

During the past 13 years, the highest Price to Peter Lynch Fair Value Ratio of Costco Wholesale Corp was 4.24. The lowest was 0.60. And the median was 2.25.


NAS:COST's Price-to-Peter-Lynch-Fair-Value is ranked lower than
91% of the 110 Companies
in the Global industry.

( Industry Median: 1.73 vs. NAS:COST: 3.81 )

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.

Costco Wholesale Corp Annual Data

Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 Aug17 Aug18
Peter Lynch Fair Value Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 53.82 53.75 45.02 44.14 58.43

Costco Wholesale Corp Quarterly Data

May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19
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 51.26 54.29 58.43 60.96 65.13

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.


Costco Wholesale Corp Distribution

* The bar in red indicates where Costco Wholesale Corp's Peter Lynch Fair Value falls into.



Calculation

Costco Wholesale Corp'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* 8.35 *7.8
=65.13

Costco Wholesale Corp's EPS without NRI for the trailing twelve months (TTM) ended in Feb. 2019 was (May. 2018 ) + (Aug. 2018 ) + (Nov. 2018 ) + (Feb. 2019 ) = $7.80.


* 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 8.35 instead of 15 in this case.

Costco Wholesale Corp'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
=248.35/65.13
=3.81

* 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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