Lynch classification
InterpretationA growth-based label — slow grower, stalwart, or fast grower — following Peter Lynch's company categories.
Formula
Based on 5-year revenue CAGR (3-year as fallback): below 5% = slow grower; 5–12% = stalwart; above 12% = fast grower
Why it matters
Peter Lynch's insight in One Up on Wall Street is that companies belong to categories, and the category determines which metrics matter and what a reasonable outcome looks like. Judging a slow grower by its growth rate, or a fast grower by its dividend, is a category error. A slow grower is a yield-and-payout story; a stalwart is a buy-at-fair-price, sell-at-euphoria story; a fast grower is a runway-and-valuation story where the growth's durability is everything.
What good looks like
No label is better than another — each has a matching playbook. For slow growers, weight shareholder yield and payout sustainability. For stalwarts, weight quality score and price against the company's own multiple history. For fast growers, weight the reverse-DCF implied growth against demonstrated growth, and watch dilution. Mismatches are the signal: a fast grower priced like a stalwart, or a slow grower priced like a fast grower.
Caveats
Lynch defined six categories; our automated label covers the three growth tiers. Cyclicals, turnarounds, and asset plays cannot be detected reliably from a growth rate alone — a cyclical near its peak looks like a fast grower and near its trough like a failing slow grower, and both readings mislead. If the company is in a boom-bust industry, apply the cyclical playbook manually regardless of the label shown.
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