Price to Earnings (P/E)
since 2005
Calculation
Celgene Corp., P/E, long-term trends, calculation
| P/E | = | Share price1, 2, 3 | ÷ | Earnings per share1 (EPS) | EPS1 | = | Net income (loss) attributable to Celgene1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 26, 2019 | 15.57 | = | 89.71 | ÷ | 5.76 | 5.76 | = | 4,046 | ÷ | 702,164,345 | |
| Feb 7, 2018 | 24.35 | = | 95.16 | ÷ | 3.91 | 3.91 | = | 2,940 | ÷ | 752,175,608 | |
| Feb 10, 2017 | 44.99 | = | 115.61 | ÷ | 2.57 | 2.57 | = | 1,999 | ÷ | 777,966,471 | |
| Feb 11, 2016 | 48.59 | = | 99.59 | ÷ | 2.05 | 2.05 | = | 1,602 | ÷ | 781,664,535 | |
| Feb 20, 2015 | 49.41 | = | 123.43 | ÷ | 2.50 | 2.50 | = | 2,000 | ÷ | 800,590,656 | |
| Feb 13, 2014 | 46.13 | = | 82.37 | ÷ | 1.79 | 1.79 | = | 1,450 | ÷ | 812,040,158 | |
| Feb 15, 2013 | 28.41 | = | 49.39 | ÷ | 1.74 | 1.74 | = | 1,456 | ÷ | 837,488,894 | |
| Feb 22, 2012 | 24.85 | = | 37.32 | ÷ | 1.50 | 1.50 | = | 1,318 | ÷ | 877,620,608 | |
| Mar 1, 2011 | 27.99 | = | 26.51 | ÷ | 0.95 | 0.95 | = | 881 | ÷ | 929,797,930 | |
| Feb 18, 2010 | 35.45 | = | 29.95 | ÷ | 0.84 | 0.84 | = | 777 | ÷ | 919,461,836 | |
| Feb 17, 2009 | — | = | 25.94 | ÷ | -1.67 | -1.67 | = | -1,534 | ÷ | 918,926,334 | |
| Feb 20, 2008 | 97.86 | = | 27.44 | ÷ | 0.28 | 0.28 | = | 226 | ÷ | 807,518,156 | |
| Feb 27, 2007 | 291.07 | = | 26.59 | ÷ | 0.09 | 0.09 | = | 69 | ÷ | 755,105,544 | |
| Mar 15, 2006 | 222.19 | = | 20.50 | ÷ | 0.09 | 0.09 | = | 64 | ÷ | 689,939,580 |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Celgene Corp. Annual Report.
The analysis of the financial metrics reveals a significant transition in the company's valuation profile from 2006 to 2019. The period is characterized by an initial phase of extreme valuation multiples, a period of stabilization, a subsequent expansion of the multiple, and a final trend of valuation compression despite record earnings growth.
- Initial Speculative Phase (2006–2008)
- During the early years of the analyzed period, the price-to-earnings (P/E) ratio was exceptionally high, peaking at 291.07 in 2007. This indicates that the market priced the shares based on high future growth expectations rather than current profitability, as earnings per share (EPS) remained low, between 0.09 and 0.28.
- Earnings Volatility and Correction (2009–2013)
- A notable disruption occurred in 2009 when EPS fell to -1.67, resulting in an undefined P/E ratio. Following this, the P/E ratio normalized significantly, trading within a range of 24.85 to 35.45 between 2010 and 2013. This period reflects a shift toward a more fundamental valuation as EPS began a steady climb from 0.84 to 1.74.
- Valuation Expansion (2014–2017)
- A secondary surge in valuation is observed between 2014 and 2017, where the P/E ratio climbed and sustained levels between 44.99 and 49.41. This expansion coincided with a sharp increase in share price, which rose from 82.37 in 2014 to a peak of 123.43 in 2015, outpacing the growth rate of the earnings.
- Multiple Compression (2018–2019)
- The final two years of the period exhibit a marked divergence between earnings and valuation. While EPS reached its highest levels, growing from 3.91 in 2018 to 5.76 in 2019, the P/E ratio declined sharply to 24.35 and then to 15.57. This trend indicates a compression of the valuation multiple, where the market was no longer willing to pay a premium for each dollar of earnings despite the company's increased profitability.
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Comparison to Competitors
Celgene Corp., P/E, long-term trends, comparison to competitors
| Celgene Corp. | AbbVie Inc. | Amgen Inc. | Bristol-Myers Squibb Co. | Danaher Corp. | Eli Lilly & Co. | Gilead Sciences Inc. | Johnson & Johnson | Merck & Co. Inc. | Pfizer Inc. | Regeneron Pharmaceuticals Inc. | Thermo Fisher Scientific Inc. | Vertex Pharmaceuticals Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 26, 2019 | 15.57 | 20.60 | 14.01 | 16.81 | 29.77 | 39.13 | 15.26 | 23.74 | 33.46 | 21.58 | 18.17 | 35.19 | 22.59 |
| Feb 7, 2018 | 24.35 | 35.47 | 64.06 | 103.55 | 27.25 | — | 22.75 | 268.10 | 61.63 | 9.99 | 28.99 | 37.66 | 155.08 |
| Feb 10, 2017 | 44.99 | 16.54 | 16.03 | 20.56 | 23.02 | 32.39 | 6.83 | 20.08 | 46.14 | 28.10 | 42.64 | 30.45 | — |
| Feb 11, 2016 | 48.59 | 17.01 | 15.95 | 64.22 | 17.85 | 33.35 | 6.75 | 18.80 | 31.64 | 26.37 | 60.50 | 26.19 | — |
| Feb 20, 2015 | 49.41 | 55.08 | 22.96 | 49.80 | 23.69 | 33.06 | 12.85 | 17.15 | 13.94 | 23.03 | 118.44 | 27.26 | — |
| Feb 13, 2014 | 46.13 | 19.64 | 18.69 | 35.01 | 19.74 | 13.88 | 42.00 | 18.72 | 37.83 | 9.32 | 77.00 | 38.43 | — |
| Feb 15, 2013 | 28.41 | 11.51 | 15.68 | 30.56 | 17.73 | 14.99 | 25.20 | 19.64 | 20.94 | 13.51 | 21.42 | 22.54 | — |
| Feb 22, 2012 | 24.85 | — | 14.61 | 15.07 | 16.92 | 10.42 | 12.20 | 18.48 | 18.63 | 15.99 | — | 15.58 | 267.42 |
| Mar 1, 2011 | 27.99 | — | 10.53 | 13.99 | 18.29 | 7.86 | 10.68 | 12.23 | 116.63 | 18.63 | — | 20.87 | — |
| Feb 18, 2010 | 35.45 | — | 12.10 | 4.03 | 20.93 | 9.18 | 16.29 | 14.22 | 9.00 | 16.41 | — | 23.49 | — |
| Feb 17, 2009 | — | — | 12.06 | 7.68 | 12.56 | — | 20.29 | 11.67 | 6.53 | 10.25 | — | 15.25 | — |
| Feb 20, 2008 | 97.86 | — | 15.64 | 20.60 | 17.35 | 19.26 | 25.19 | 17.07 | 29.88 | 18.51 | — | 30.76 | — |
| Feb 27, 2007 | 291.07 | — | 25.43 | 34.64 | 19.65 | 22.40 | — | 17.02 | 21.57 | 9.18 | — | 113.28 | — |
| Mar 15, 2006 | 222.19 | — | 23.70 | 14.96 | 21.38 | 31.90 | 34.15 | 16.95 | 16.62 | 23.92 | — | 25.36 | — |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Pharmaceuticals, Biotechnology & Life Sciences)
Celgene Corp., P/E, long-term trends, comparison to sector (pharmaceuticals, biotechnology & life sciences)
| Celgene Corp. | Pharmaceuticals, Biotechnology & Life Sciences | |
|---|---|---|
| Feb 26, 2019 | 15.57 | 22.89 |
| Feb 7, 2018 | 24.35 | 35.21 |
| Feb 10, 2017 | 44.99 | 20.62 |
| Feb 11, 2016 | 48.59 | 19.37 |
| Feb 20, 2015 | 49.41 | 21.40 |
| Feb 13, 2014 | 46.13 | 19.54 |
| Feb 15, 2013 | 28.41 | 17.56 |
| Feb 22, 2012 | 24.85 | 16.42 |
| Mar 1, 2011 | 27.99 | 16.11 |
| Feb 18, 2010 | 35.45 | 11.66 |
| Feb 17, 2009 | — | 12.21 |
| Feb 20, 2008 | 97.86 | 20.04 |
| Feb 27, 2007 | 291.07 | 17.46 |
| Mar 15, 2006 | 222.19 | 20.94 |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Health Care)
Celgene Corp., P/E, long-term trends, comparison to industry (health care)
| Celgene Corp. | Health Care | |
|---|---|---|
| Feb 26, 2019 | 15.57 | 24.32 |
| Feb 7, 2018 | 24.35 | 33.04 |
| Feb 10, 2017 | 44.99 | 21.90 |
| Feb 11, 2016 | 48.59 | 19.53 |
| Feb 20, 2015 | 49.41 | 21.38 |
| Feb 13, 2014 | 46.13 | 18.67 |
| Feb 15, 2013 | 28.41 | 15.77 |
| Feb 22, 2012 | 24.85 | 15.79 |
| Mar 1, 2011 | 27.99 | 15.12 |
| Feb 18, 2010 | 35.45 | 11.71 |
| Feb 17, 2009 | — | 13.07 |
| Feb 20, 2008 | 97.86 | 19.29 |
| Feb 27, 2007 | 291.07 | 18.61 |
| Mar 15, 2006 | 222.19 | 21.71 |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).