PEG below 1
Price-to-earnings divided by the expected earnings growth rate at or below 1.0. Lynch's headline number for whether a growth stock is fairly priced.
Definition
What is the Lynch-Fit Score?
The Lynch-Fit Score is a 0 to 100 grade that measures how closely a stock fits Peter Lynch's PEG-driven framework: a PEG ratio under 1, consistent earnings growth, and a business simple enough to explain in a sentence. invest-like computes it for every US-listed stock.
Last reviewed:
Short answer
Lynch-Fit grades a stock from 0 to 100 against the framework Peter Lynch ran at Magellan and codified in One Up On Wall Street: PEG ratio under 1, consistent 10 to 25 percent earnings growth, an understandable business, and a balance sheet that can fund growth without dilutive equity raises. The headline number blends the pillars equally and gives one number. Educational fit assessment, never advice.
How the Lynch-Fit Score is calculated
Daily fundamentals from Financial Modeling Prep feed the four pillars. PEG uses trailing earnings and a forward growth estimate that blends consensus with realised 5-year earnings growth. Each pillar produces a 0 to 100 sub-score with one paragraph of LLM-generated reasoning. The sub-scores blend equally into the headline grade.
Consistent earnings growth
Multi-year earnings expansion in the 10 to 25 percent range. Faster usually means fragile; slower stops being a growth story.
Understandable business
Lynch's 'buy what you know' principle: products and revenue streams a layperson can describe in one sentence without industry jargon.
Clean balance sheet
Manageable debt levels, positive free cash flow, and enough cushion to keep funding growth through a recession without dilutive equity raises.
Why Lynch-Fit matters
Lynch ran Magellan from 1977 to 1990 and compounded at about 29 percent annually. His framework deliberately surfaces growth-at-a-reasonable-price stocks that look expensive on Graham metrics but cheap relative to growth. Treating Lynch-Fit as one of seven lenses catches steady compounders that pure deep-value screens miss.
The 0 to 100 score is comparable across every stock and appears in the public API and the backtested track record at /track-record/.
Kostenlose Wochen-E-Mail
Die stärksten Aktien der Woche, jeden Montag.
Jeden Montag: die Aktien, bei denen sich die meisten der sieben Investoren neu einig sind. Eine E-Mail, jederzeit abbestellbar.
Recherche, keine Anlageberatung.
Related
- Seven-framework methodology hub - how Lynch-Fit sits alongside the other six value-investing frameworks invest-like scores every stock against.
- Top Lynch-fit stocks today - the live ranking of US-listed stocks scoring highest on Lynch's PEG-led growth-at-a-reasonable-price test.
- Cross-framework working papers - evidence on how Lynch-style PEG screens perform across decades of US-listed equity data.
See the Lynch-Fit grade for any stock
Open any verdict page and Lynch-Fit appears alongside the other six framework scores.
Educational only. invest-like is not a registered investment adviser; nothing here is personalised investment advice. Always do your own research and consider your individual circumstances.