Microsoft Excel LibreOffice Calc

Common Stock Valuation Ratios (Price Multiples)

Difficulty: Beginner


Current Valuation Ratios

Alphabet Inc., current price multiples

Microsoft Excel LibreOffice Calc
Alphabet Inc. Adobe Systems Inc. Facebook Inc. International Business Machines Corp. Microsoft Corp. Oracle Corp. salesforce.com inc. Software & Computer Services Technology
Selected Financial Data
Current share price (P) $ 1,173.37
No. shares of common stock outstanding 695,677,773
Growth rate (g) 14.38%
 
Earnings per share (EPS) $ 18.20
Next year expected EPS $ 20.82
Operating profit per share $ 37.58
Sales per share $ 159.35
Book value per share (BVPS) $ 219.21
Ratios (Price Multiples)
Price to earnings (P/E) 64.47 76.34 29.97 23.80 53.06 50.74 942.51 41.25 32.16
Price to next year expected earnings 56.36 69.17 26.60 17.25 48.35 43.41 977.21 36.08 27.86
Price-earnings-growth (PEG) 4.48 7.37 2.37 0.63 5.44 3.00 2.88 2.09
Price to operating profit (P/OP) 31.22 59.64 23.64 11.61 25.08 14.19 509.61 28.86 23.26
Price to sales (P/S) 7.36 17.71 11.75 1.73 7.97 4.87 11.46 7.36 5.72
Price to book value (P/BV) 5.35 15.29 6.42 7.78 10.63 4.24 12.80 7.12 6.61

If company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.

Otherwise, if company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.


Historical Valuation Ratios (Summary)

Alphabet Inc., historical price multiples

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Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Price to earnings (P/E) 59.34 28.45 29.71 24.87 30.87
Price to operating profit (P/OP) 28.74 23.37 24.29 21.78 28.55
Price to sales (P/S) 6.78 6.14 6.27 5.44 6.67
Price to book value (P/BV) 4.93 3.99 3.91 3.44 4.57
Ratio Description The company
P/E ratio The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. Alphabet Inc.'s P/E ratio declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
P/OP ratio Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. Alphabet Inc.'s P/OP ratio declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
P/S ratio An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. Alphabet Inc.'s P/S ratio declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company's required rate of return and its actual rate of return. Alphabet Inc.'s P/BV ratio increased from 2015 to 2016 and from 2016 to 2017.

Price to Earnings (P/E)

Alphabet Inc., historical P/E calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
No. shares of common stock outstanding1 695,297,530 691,420,327 688,319,767 680,622,782 672,101,662
Selected Financial Data (USD $)
Net income available to all stockholders (in millions) 12,662  19,478  15,826  14,444  12,920 
Earnings per share (EPS)3 18.21 28.17 22.99 21.22 19.22
Share price1, 2 1,080.60 801.49 683.11 527.83 593.35
Ratio
P/E ratio4 59.34 28.45 29.71 24.87 30.87
Benchmarks
P/E Ratio, Competitors
Adobe Systems Inc. 57.41 46.80 70.59 132.73 104.21
Facebook Inc. 35.20 37.05 84.21 74.26 106.36
International Business Machines Corp. 25.07 14.29 9.65 13.55 11.58
Microsoft Corp. 26.25 26.08 30.63 16.11 12.14
Oracle Corp. 22.49 18.53 17.92 16.33 12.78
salesforce.com inc. 324.94
P/E Ratio, Sector
Software & Computer Services 35.63 26.43 28.01 21.60 19.01
P/E Ratio, Industry
Technology 27.19 20.90 18.72 18.58 16.17

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Alphabet Inc.'s Annual Report.

2017 Calculations

3 EPS = Net income available to all stockholders ÷ No. shares of common stock outstanding
= 12,662,000,000 ÷ 695,297,530 = 18.21

4 P/E ratio = Share price ÷ EPS
= 1,080.60 ÷ 18.21 = 59.34

Ratio Description The company
P/E ratio The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. Alphabet Inc.'s P/E ratio declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Price to Operating Profit (P/OP)

Alphabet Inc., historical P/OP calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
No. shares of common stock outstanding1 695,297,530 691,420,327 688,319,767 680,622,782 672,101,662
Selected Financial Data (USD $)
Income from operations (in millions) 26,146  23,716  19,360  16,496  13,966 
Operating profit per share3 37.60 34.30 28.13 24.24 20.78
Share price1, 2 1,080.60 801.49 683.11 527.83 593.35
Ratio
P/OP ratio4 28.74 23.37 24.29 21.78 28.55
Benchmarks
P/OP Ratio, Competitors
Adobe Systems Inc. 44.86 36.62 49.21 86.32 71.49
Facebook Inc. 27.76 30.46 49.89 43.72 56.90
International Business Machines Corp. 12.22 12.94 8.11 8.79 9.74
Microsoft Corp. 24.93 21.70 20.57 12.81 9.91
Oracle Corp. 16.52 13.09 12.84 12.12 9.51
salesforce.com inc. 908.77 411.51
P/OP Ratio, Sector
Software & Computer Services 24.93 21.61 20.87 16.32 15.51
P/OP Ratio, Industry
Technology 19.67 16.53 14.33 14.28 12.96

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Alphabet Inc.'s Annual Report.

2017 Calculations

3 Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= 26,146,000,000 ÷ 695,297,530 = 37.60

4 P/OP ratio = Share price ÷ Operating profit per share
= 1,080.60 ÷ 37.60 = 28.74

Ratio Description The company
P/OP ratio Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. Alphabet Inc.'s P/OP ratio declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Price to Sales (P/S)

Alphabet Inc., historical P/S calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
No. shares of common stock outstanding1 695,297,530 691,420,327 688,319,767 680,622,782 672,101,662
Selected Financial Data (USD $)
Revenues (in millions) 110,855  90,272  74,989  66,001  59,825 
Sales per share3 159.44 130.56 108.95 96.97 89.01
Share price1, 2 1,080.60 801.49 683.11 527.83 593.35
Ratio
P/S ratio4 6.78 6.14 6.27 5.44 6.67
Benchmarks
P/S Ratio, Competitors
Adobe Systems Inc. 13.32 9.34 9.27 8.59 7.45
Facebook Inc. 13.80 13.70 17.32 17.51 20.27
International Business Machines Corp. 1.82 2.12 1.56 1.76 1.91
Microsoft Corp. 6.19 5.13 3.99 4.10 3.41
Oracle Corp. 5.56 4.45 4.66 4.67 3.75
salesforce.com inc. 6.96 7.09 7.82 9.54 8.92
P/S Ratio, Sector
Software & Computer Services 6.36 5.43 4.88 4.43 4.18
P/S Ratio, Industry
Technology 4.83 4.00 3.32 3.41 3.03

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Alphabet Inc.'s Annual Report.

2017 Calculations

3 Sales per share = Revenues ÷ No. shares of common stock outstanding
= 110,855,000,000 ÷ 695,297,530 = 159.44

4 P/S ratio = Share price ÷ Sales per share
= 1,080.60 ÷ 159.44 = 6.78

Ratio Description The company
P/S ratio An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. Alphabet Inc.'s P/S ratio declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Price to Book Value (P/BV)

Alphabet Inc., historical P/BV calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
No. shares of common stock outstanding1 695,297,530 691,420,327 688,319,767 680,622,782 672,101,662
Selected Financial Data (USD $)
Stockholders' equity (in millions) 152,502  139,036  120,331  104,500  87,309 
Book value per share (BVPS)3 219.33 201.09 174.82 153.54 129.90
Share price1, 2 1,080.60 801.49 683.11 527.83 593.35
Ratio
P/BV ratio4 4.93 3.99 3.91 3.44 4.57
Benchmarks
P/BV Ratio, Competitors
Adobe Systems Inc. 11.50 7.37 6.35 5.26 4.49
Facebook Inc. 7.54 6.39 7.02 6.05 10.31
International Business Machines Corp. 8.20 9.30 8.92 13.73 8.37
Microsoft Corp. 7.69 6.08 4.66 3.96 3.36
Oracle Corp. 3.90 3.49 3.66 3.82 3.13
salesforce.com inc. 7.78 9.45 10.57 12.79 11.74
P/BV Ratio, Sector
Software & Computer Services 6.15 5.19 4.85 4.51 4.69
P/BV Ratio, Industry
Technology 5.59 4.57 4.22 4.20 3.74

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Alphabet Inc.'s Annual Report.

2017 Calculations

3 BVPS = Stockholders' equity ÷ No. shares of common stock outstanding
= 152,502,000,000 ÷ 695,297,530 = 219.33

4 P/BV ratio = Share price ÷ BVPS
= 1,080.60 ÷ 219.33 = 4.93

Ratio Description The company
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company's required rate of return and its actual rate of return. Alphabet Inc.'s P/BV ratio increased from 2015 to 2016 and from 2016 to 2017.