📊 Peter Lynch Fair Value Calculator
Peter Lynch Formula: Fair Value = EPS × Expected Growth Rate
PEG Ratio = P/E Ratio ÷ Growth Rate. PEG < 1 = Undervalued ✅ | PEG = 1 = Fair Value ⚖️ | PEG > 1 = Overvalued ❌
PEG Ratio = P/E Ratio ÷ Growth Rate. PEG < 1 = Undervalued ✅ | PEG = 1 = Fair Value ⚖️ | PEG > 1 = Overvalued ❌
Peter Lynch Fair Value
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Current P/E Ratio
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PEG Ratio
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Verdict
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💡 Peter Lynch Tips
The PEG Ratio Rule
Peter Lynch said: a fairly valued company has P/E equal to its growth rate. So if growth = 15%, fair P/E = 15. This is the foundation of his valuation method.
Add Dividend Yield for Income Stocks
For dividend-paying Pakistani companies (like MCB, OGDC), Lynch added dividend yield to growth rate: Fair P/E = Growth Rate + Dividend Yield.
Best For Pakistani Growth Stocks
This method works well for consistently growing PSX companies. Avoid using it for cyclical or commodity companies where earnings fluctuate greatly.