Peter Lynch's formula is:
Microsoft Fair Value
= Earnings Growth Rate x TTM EPS
Microsoft Fair Value
= 18.24 x 11.86
Microsoft Fair Value
= 216.31
The earnings growth rate we use in the formula is the average growth rate of net income/earnings over the last 5 years. If the average growth rate is smaller than 5%, we set it to 5%. If it is larger than 25%, we set it to 25%. If the TTM EPS is negative, Peter Lynch Fair Value's result can be unreliable.
Historical Earnings | ||||||
2020-06-30 | 2021-06-30 | 2022-06-30 | 2023-06-30 | 2024-06-30 | 5Y Avg | |
Net income | 44,281.00 | 61,271.00 | 72,738.00 | 72,361.00 | 88,136.00 | 67,757.40 |
YoY growth | 12.85% | 38.37% | 18.72% | -0.52% | 21.80% | 18.24% |