YUM
Yum! Brands Inc
Price:  
149.79 
USD
Volume:  
1,757,972
United States | Hotels, Restaurants & Leisure

Yum! Fair Value

-71.4 %
Upside

What is the fair value of Yum!?

As of 2025-07-12, the Fair Value of Yum! Brands Inc (YUM) is 42.85 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 149.79 USD, the upside of Yum! Brands Inc is -71.4%.

Is Yum! a good investment?

With the market price of 149.79 USD and our fair value calculation, Yum! Brands Inc (YUM) is not a good investment. Investing in Yum! stocks now will result in a potential loss of 71.4%.

149.79 USD
Stock Price
42.85 USD
Fair Price
FAIR VALUE CALCULATION

Yum! Fair Value

Peter Lynch's formula is:

Yum! Fair Value
= Earnings Growth Rate x TTM EPS
Yum! Fair Value
= 8.4 x 5.13
Yum! Fair Value
= 42.85

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
12-202012-202112-202212-202312-20245Y Avg
Net income9041,5751,3251,5971,4861,377
YoY growth-30.1%74.2%-15.9%20.5%-7%8.4%

Yum! Fair Value - Peers Benchmarking

Market Cap (mil)EPS Fair Value Upside
a
Chipotle Mexican Grill Inc75,4521.228.97-48.3%
Restaurant Brands International Inc34,7182.315.83-82.8%
Darden Restaurants Inc24,4999224.197.1%
Yum China Holdings Inc17,7702.538.35-19.4%
Domino's Pizza Inc15,90417.8150.65-67.6%
Texas Roadhouse Inc12,4786.5163.57-13%
Brinker International Inc7,3387.5187.3513.5%
Wendys Co2,116110.98-0.4%
Arcos Dorados Holdings Inc1,5900.68.026.2%
Cracker Barrel Old Country Store Inc1,4982.664.87-3.6%

Yum! Fair Value - Key Data

Market Cap (mil)41,636
P/E29.2x
Forward P/E21.9x
EPS5.13
Avg earnings growth rate8.4%
TTM earnings1,425

Yum! Fair Value - Formula's Origin

Peter Lynch is one of the most legendary investors/fund managers of all time. His philosophy for stock investing is very simple and straightforward: he invests in stocks that are undervalued, meaning its P/E is less than or equal to its earnings growth rate. He believes that if a stock is trading at its fair value, the PEG ratio, which was also invented by him, should be 1.

Therefore, his formula to determine a company's fair value is:

Peter Lynch Fair Value = Earnings Growth Rate * EPS * PEG

PEG is set to 1 so we can ignore it in the calculation. Based on the formula, if the earnings growth rate of a company is 15%, Peter Lynch is willing to buy its share up to P/E = 15.