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How do you evaluate the Lynch Ratio for a stock? What is considered good?
Zack's includes the Lynch Ratio in its Snapshot reports on stocks. Are we looking for a ration above 1.0?
2 Answers
- 1 decade agoFavorite Answer
The Lynch ratio, named after Peter Lynch of fidelity fame, is also known as the PEG ratio, which is defined as PE ratio/Growth rate of earnings. You want this ratio to be as small as possible, but certainly below 1.
- 8 years ago
The answer above is incorrect. Zacks defines the Lynch Ratio as (Growth/PE) so it is the inversion of the PEG ratio. Higher is better. Just like with the PEG ratio where your looking for below 1.0, with the Lynch as defined by Zacks, you are looking for above 1.0.
