Lynch fair value comes from Peter Lynch's idea that a company's reasonable price-to-earnings (P/E) ratio should roughly equal its earnings growth rate — in other words, a PEG ratio of 1. It puts growth at the center of valuation: faster-growing companies can justify higher P/E multiples.
Lynch Fair Value ≈ PEG = 1 → Fair P/E = Earnings Growth Rate (%)
If a company grows earnings at 20% per year, a P/E around 20 is considered fair by Lynch's logic (PEG = 1). A PEG below 1 may suggest the stock is undervalued relative to its growth; above 1 may suggest it's expensive. It's a quick growth-adjusted sanity check, not a precise price.
A company growing earnings at 25% per year with a current P/E of 15 has a PEG of 15 / 25 = 0.6. Since this is below 1, the stock may be attractively priced relative to its growth.
Fin Screener estimates Lynch fair value using PEG logic for each stock and compares it with the current price, helping you see whether the market is paying a reasonable multiple for the company's growth.
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