Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Celgene Corp., current price multiples
| 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. | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||
| Current share price (P) | $108.03 | |||||||||||||
| No. shares of common stock outstanding | 711,714,480 | |||||||||||||
| Growth rate (g) | 38.99% | |||||||||||||
| Earnings per share (EPS) | $5.68 | |||||||||||||
| Next year expected EPS | $7.90 | |||||||||||||
| Operating profit per share | $7.29 | |||||||||||||
| Sales per share | $21.45 | |||||||||||||
| Book value per share (BVPS) | $8.66 | |||||||||||||
| Valuation Ratios (Price Multiples) | ||||||||||||||
| Price to earnings (P/E) | 19.00 | 75.28 | 36.43 | — | 36.49 | 69.40 | 286.80 | 26.07 | 11.60 | 17.12 | 12.75 | 24.33 | — | |
| Price to next year expected earnings | 13.67 | 172.71 | 28.70 | — | 33.45 | 54.63 | — | 23.48 | — | 16.30 | 10.31 | 21.23 | — | |
| Price-earnings-growth (PEG) | 0.49 | — | 1.35 | — | 4.01 | 2.57 | — | 2.36 | — | 3.39 | 0.54 | 1.66 | — | |
| Price to operating profit (P/OP) | 14.81 | 35.24 | 20.53 | — | 29.26 | 56.98 | 82.83 | 17.63 | 9.98 | 11.08 | 14.10 | 21.01 | — | |
| Price to sales (P/S) | 5.04 | 5.72 | 4.65 | 1.95 | 5.96 | 16.32 | 4.81 | 4.13 | 3.10 | 2.16 | 3.96 | 3.59 | 10.28 | |
| Price to book value (P/BV) | 12.48 | 96.85 | 25.36 | 5.77 | 2.87 | 51.78 | 7.12 | 5.13 | 4.29 | 1.56 | 1.92 | 3.11 | 6.91 | |
Based on: 10-K (reporting date: 2018-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Celgene Corp., historical price multiples
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).
- Price to Earnings (P/E) Ratio
- The Price to Earnings ratio exhibits a clear downward trend over the five-year period. Starting at a high of 49.41 at the end of 2014, it remained relatively stable through 2015 and 2016, with minor decreases to 48.59 and 44.99 respectively. Following this, a more pronounced decline occurred, dropping significantly to 24.35 in 2017 and further to 15.57 in 2018. This suggests a substantial adjustment in investor expectations or earnings growth relative to stock price.
- Price to Operating Profit (P/OP) Ratio
- This ratio follows a similar declining pattern to the P/E ratio, decreasing progressively each year. It starts at 39.23 in 2014, falling gradually to 34.53 in 2015 and 28.4 in 2016. More notable declines occurred in subsequent years, reaching 15.21 in 2017 and further down to 12.13 by the end of 2018. This trend indicates increased operating profitability relative to stock price or a market reassessment of the company’s operating income valuation.
- Price to Sales (P/S) Ratio
- The Price to Sales ratio shows a consistent and marked decline over the entire period. Beginning at 13.06 in 2014, it falls sharply to 8.5 in 2015, continuing to decrease moderately to 8.04 in 2016. This downward trend persists more steeply thereafter, with the ratio dropping to 5.52 in 2017 and 4.13 in 2018. This decreasing P/S ratio suggests either a more conservative assessment by the market of sales revenue or an improvement in sales relative to the market price.
- Price to Book Value (P/BV) Ratio
- The Price to Book Value ratio shows a less consistent but generally downward trend. It starts at 15.14 in 2014 and declines steadily to 13.15 in 2015. A slight uptick occurs in 2016, rising marginally to 13.63 before declining again to 10.34 in 2017 and remaining nearly stable at 10.22 in 2018. The overall decline suggests a gradual adjustment in the market valuation relative to the company’s book value, possibly reflecting changes in assets, liabilities, or perceived growth prospects.
Price to Earnings (P/E)
Celgene Corp., historical P/E calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 702,164,345 | 752,175,608 | 777,966,471 | 781,664,535 | 800,590,656 | |
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | 4,046) | 2,940) | 1,999) | 1,602) | 2,000) | |
| Earnings per share (EPS)2 | 5.76 | 3.91 | 2.57 | 2.05 | 2.50 | |
| Share price1, 3 | 89.71 | 95.16 | 115.61 | 99.59 | 123.43 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 15.57 | 24.35 | 44.99 | 48.59 | 49.41 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| 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. | — | — | — | — | — | |
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).
1 Data adjusted for splits and stock dividends.
2 2018 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 4,046,000,000 ÷ 702,164,345 = 5.76
3 Closing price as at the filing date of Celgene Corp. Annual Report.
4 2018 Calculation
P/E ratio = Share price ÷ EPS
= 89.71 ÷ 5.76 = 15.57
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a declining trend over the five-year period, decreasing from $123.43 at the end of 2014 to $89.71 at the end of 2018. Notably, the price showed a drop in 2015, a modest recovery in 2016, followed by consecutive declines through 2017 and 2018.
- Earnings Per Share (EPS)
- Earnings per share demonstrated a consistent upward trajectory throughout the period. Starting at $2.50 in 2014, the EPS dipped slightly in 2015 to $2.05, but then increased steadily, reaching $5.76 by 2018. This reflects a growth rate more than doubling the EPS within four years.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio displayed a significant downward trend, falling from 49.41 in 2014 to 15.57 in 2018. The ratio remained relatively stable between 2014 and 2016, then experienced a notable decrease in 2017 and 2018, indicating that the market valuation relative to earnings contracted considerably over the latter years.
- Insights and Interpretation
- The decline in share price despite growing earnings per share suggests a possible shift in market sentiment or reevaluation of growth prospects. The sharply decreasing P/E ratio supports this observation, indicating that investors were willing to pay less for each dollar of earnings over time. This could reflect factors such as increased risk perceptions, changing industry conditions, or expectations of slower future growth, despite improving profitability on a per-share basis.
Price to Operating Profit (P/OP)
Celgene Corp., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 702,164,345 | 752,175,608 | 777,966,471 | 781,664,535 | 800,590,656 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | 5,191) | 4,707) | 3,167) | 2,255) | 2,519) | |
| Operating profit per share2 | 7.39 | 6.26 | 4.07 | 2.88 | 3.15 | |
| Share price1, 3 | 89.71 | 95.16 | 115.61 | 99.59 | 123.43 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 12.13 | 15.21 | 28.40 | 34.53 | 39.23 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| 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. | — | — | — | — | — | |
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).
1 Data adjusted for splits and stock dividends.
2 2018 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 5,191,000,000 ÷ 702,164,345 = 7.39
3 Closing price as at the filing date of Celgene Corp. Annual Report.
4 2018 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 89.71 ÷ 7.39 = 12.13
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited a declining trend over the period from 2014 to 2018. Starting at 123.43 US dollars at the end of 2014, the price decreased consistently with some variations, reaching 89.71 US dollars by the end of 2018. The most notable drop occurred between 2016 and 2017, where the price fell from 115.61 to 95.16 US dollars, followed by a continued decline through 2018.
- Operating Profit Per Share
- Operating profit per share demonstrated a generally increasing trajectory over the given years. Beginning at 3.15 US dollars in 2014, there was a slight dip to 2.88 US dollars in 2015. From 2015 onward, the figure rose steadily, reaching 7.39 US dollars by 2018. This reflects improving operational efficiency or profitability on a per-share basis throughout the period.
- Price-to-Operating-Profit Ratio (P/OP)
- The P/OP ratio experienced a significant decline from 39.23 in 2014 to 12.13 in 2018, indicating a positive reassessment of the company's valuation relative to its operating profit. The decline suggests that the stock price fell less sharply relative to improvements in operating profit per share, or alternatively that the market began to price the company's operating profits more favorably. The ratio dropped especially markedly between 2016 and 2017, from 28.40 to 15.21, continuing its downward trend through 2018.
- Overall Insights
- The data indicates a scenario where, despite a declining share price over the years, operating profitability per share improved significantly, driving a lower P/OP ratio. This may reflect a market undervaluation or a lag in price appreciation relative to operational performance gains. The declining P/OP ratio can be interpreted as the company becoming more attractively valued when considering its operating profit growth, which could attract investor interest based on improving fundamentals.
Price to Sales (P/S)
Celgene Corp., historical P/S calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 702,164,345 | 752,175,608 | 777,966,471 | 781,664,535 | 800,590,656 | |
| Selected Financial Data (US$) | ||||||
| Net product sales (in millions) | 15,265) | 12,973) | 11,185) | 9,161) | 7,564) | |
| Sales per share2 | 21.74 | 17.25 | 14.38 | 11.72 | 9.45 | |
| Share price1, 3 | 89.71 | 95.16 | 115.61 | 99.59 | 123.43 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 4.13 | 5.52 | 8.04 | 8.50 | 13.06 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| 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. | — | — | — | — | — | |
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).
1 Data adjusted for splits and stock dividends.
2 2018 Calculation
Sales per share = Net product sales ÷ No. shares of common stock outstanding
= 15,265,000,000 ÷ 702,164,345 = 21.74
3 Closing price as at the filing date of Celgene Corp. Annual Report.
4 2018 Calculation
P/S ratio = Share price ÷ Sales per share
= 89.71 ÷ 21.74 = 4.13
5 Click competitor name to see calculations.
The financial data reveals several significant trends over the five-year period from 2014 to 2018.
- Share Price
- The share price experienced fluctuations and a general downward trend. Starting at $123.43 in 2014, it declined to $99.59 in 2015, recovered partially to $115.61 in 2016, but then steadily decreased to $95.16 in 2017 and further to $89.71 in 2018. This pattern indicates volatility with an overall decrease in market valuation over the period.
- Sales per Share
- Sales per share demonstrated consistent growth throughout the period. Values increased from $9.45 in 2014 to $11.72 in 2015, continuing upward to $14.38 in 2016, $17.25 in 2017, and reaching $21.74 in 2018. This steady increase suggests improving operational performance or revenue generation on a per-share basis.
- Price-to-Sales Ratio (P/S)
- The price-to-sales ratio showed a notable decline over the years. Beginning at 13.06 in 2014, it dropped substantially to 8.5 in 2015, then to 8.04 in 2016, followed by a further decrease to 5.52 in 2017, and finally to 4.13 in 2018. This decline indicates that the market price per unit of sales has fallen, possibly reflecting market recalibration of valuation relative to sales growth.
In summary, despite increasing sales per share, the share price declined and the price-to-sales ratio contracted significantly. This divergence may imply that investors adjusted their expectations or perceived risks differently over time, leading to lower valuations relative to sales growth. The persistent increase in sales per share indicates strengthening underlying business metrics, whereas market sentiment or other external factors could be influencing the share price and valuation ratios negatively.
Price to Book Value (P/BV)
Celgene Corp., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 702,164,345 | 752,175,608 | 777,966,471 | 781,664,535 | 800,590,656 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in millions) | 6,161) | 6,921) | 6,599) | 5,919) | 6,525) | |
| Book value per share (BVPS)2 | 8.77 | 9.20 | 8.48 | 7.57 | 8.15 | |
| Share price1, 3 | 89.71 | 95.16 | 115.61 | 99.59 | 123.43 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 10.22 | 10.34 | 13.63 | 13.15 | 15.14 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| 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. | — | — | — | — | — | |
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).
1 Data adjusted for splits and stock dividends.
2 2018 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= 6,161,000,000 ÷ 702,164,345 = 8.77
3 Closing price as at the filing date of Celgene Corp. Annual Report.
4 2018 Calculation
P/BV ratio = Share price ÷ BVPS
= 89.71 ÷ 8.77 = 10.22
5 Click competitor name to see calculations.
The share price exhibited a declining trend over the analyzed period, starting at $123.43 at the end of 2014 and decreasing to $89.71 by the end of 2018. Notably, the share price reached a lower point in 2017 at $95.16, followed by a slight decrease in 2018, indicating a general weakening in market valuation over these years.
Book value per share (BVPS) showed some fluctuations but overall presented a modest increase from $8.15 in 2014 to $8.77 in 2018. The BVPS saw a dip to $7.57 in 2015 but recovered and peaked at $9.20 in 2017 before slightly declining again in 2018. This suggests some variability in the company's net asset value per share, with potential improvements mid-period.
The price-to-book value (P/BV) ratio declined substantially from 15.14 in 2014 to 10.22 in 2018, reflecting that the market price became closer to the book value of the company over time. This decrease in P/BV ratio may indicate a reduced market premium on the company's shares or a reassessment of the company’s growth prospects or risk profile by investors.
In summary, while the book value per share remained relatively stable with slight increases, the share price faced a consistent downward trend. Consequently, the P/BV ratio contracted significantly, pointing to a changed market perception and valuation of the company's equity during the period analyzed.