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
Express Scripts Holding Co., current price multiples
| Express Scripts Holding Co. | Abbott Laboratories | Elevance Health Inc. | Intuitive Surgical Inc. | Medtronic PLC | UnitedHealth Group Inc. | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Current share price (P) | $96.97 | ||||||
| No. shares of common stock outstanding | 563,860,000 | ||||||
| Growth rate (g) | 15.44% | ||||||
| Earnings per share (EPS) | $8.01 | ||||||
| Next year expected EPS | $9.25 | ||||||
| Operating profit per share | $9.74 | ||||||
| Sales per share | $177.46 | ||||||
| Book value per share (BVPS) | $32.13 | ||||||
| Valuation Ratios (Price Multiples) | |||||||
| Price to earnings (P/E) | 12.10 | 26.87 | 15.17 | 50.12 | 23.62 | 28.04 | |
| Price to next year expected earnings | 10.49 | 24.91 | 13.57 | 43.94 | 23.30 | 24.98 | |
| Price-earnings-growth (PEG) | 0.78 | 3.43 | 1.28 | 3.57 | 17.24 | 2.29 | |
| Price to operating profit (P/OP) | 9.95 | 21.76 | 13.07 | 48.60 | 17.53 | 17.82 | |
| Price to sales (P/S) | 0.55 | 3.95 | 0.43 | 14.22 | 3.12 | 0.76 | |
| Price to book value (P/BV) | 3.02 | 3.36 | 1.96 | 8.03 | 2.29 | 3.59 | |
Based on: 10-K (reporting date: 2017-12-31).
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)
Express Scripts Holding Co., historical price multiples
Based on: 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).
A pronounced contraction in valuation multiples is observed across the five-year period from 2013 to 2017, most notably within the earnings and operating profit metrics. While revenue and book value multiples remained relatively stable, the significant decline in price-to-earnings and price-to-operating profit ratios suggests a substantial shift in market sentiment or a fundamental change in growth expectations.
- Price to Earnings (P/E)
- A consistent and sharp downward trend is evident, with the ratio falling from 32.44 in 2013 to 9.82 by 2017. This represents a significant compression of the earnings multiple, particularly between 2014 and 2016.
- Price to Operating Profit (P/OP)
- The P/OP ratio mirrored the trajectory of the P/E ratio. After a marginal increase to 17.50 in 2014, the ratio declined steadily to 8.08 by 2017, indicating a reduction in the premium the market was willing to pay for operating profitability.
- Price to Sales (P/S)
- The P/S ratio remained relatively stable and low throughout the period. Following a peak of 0.62 in 2014, the ratio narrowed to a range between 0.42 and 0.45 from 2015 to 2017, reflecting a consistent relationship between market capitalization and total revenue.
- Price to Book Value (P/BV)
- The P/BV ratio exhibited moderate volatility with an overall gradual decline. After reaching a peak of 3.14 in 2014, the ratio decreased to 2.45 by 2017, suggesting a slight reduction in the market premium attributed to the company's equity base.
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Price to Earnings (P/E)
Express Scripts Holding Co., historical P/E calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 564,347,000 | 605,720,000 | 668,046,000 | 726,898,000 | 776,032,000 | |
| Selected Financial Data (US$) | ||||||
| Net income attributable to Express Scripts (in thousands) | 4,517,400) | 3,404,400) | 2,476,400) | 2,007,600) | 1,844,600) | |
| Earnings per share (EPS)2 | 8.00 | 5.62 | 3.71 | 2.76 | 2.38 | |
| Share price1, 3 | 78.64 | 69.63 | 68.65 | 86.72 | 77.12 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 9.82 | 12.39 | 18.52 | 31.40 | 32.44 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 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).
1 Data adjusted for splits and stock dividends.
2 2017 Calculation
EPS = Net income attributable to Express Scripts ÷ No. shares of common stock outstanding
= 4,517,400,000 ÷ 564,347,000 = 8.00
3 Closing price as at the filing date of Express Scripts Holding Co. Annual Report.
4 2017 Calculation
P/E ratio = Share price ÷ EPS
= 78.64 ÷ 8.00 = 9.82
5 Click competitor name to see calculations.
Between 2013 and 2017, a pronounced divergence occurred between earnings performance and market valuation. While earnings per share demonstrated consistent and substantial growth, the price-to-earnings (P/E) multiple experienced a steady and significant contraction.
- Earnings per Share (EPS) Trend
- A strong upward trajectory is observed in earnings per share, which increased from 2.38 US$ in 2013 to 8.00 US$ in 2017. This represents a consistent improvement in profitability over the analyzed period.
- Price-to-Earnings (P/E) Ratio Compression
- The P/E ratio declined sharply from 32.44 in 2013 to 9.82 in 2017. This trend indicates a marked reduction in the valuation multiple the market was willing to assign to the company's earnings.
- Share Price Volatility
- The share price fluctuated throughout the period, reaching a peak of 86.72 US$ in 2014 before declining and subsequently recovering to 78.64 US$ by 2017. The relative stability of the share price in the face of rapidly increasing earnings served as the primary driver for the compression of the P/E ratio.
The observed patterns suggest a fundamental re-rating of the stock. Despite the significant growth in underlying earnings, the market shifted from a high-growth valuation multiple to a more conservative valuation by 2017.
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Price to Operating Profit (P/OP)
Express Scripts Holding Co., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 564,347,000 | 605,720,000 | 668,046,000 | 726,898,000 | 776,032,000 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in thousands) | 5,494,000) | 5,087,800) | 4,339,300) | 3,602,400) | 3,551,700) | |
| Operating profit per share2 | 9.74 | 8.40 | 6.50 | 4.96 | 4.58 | |
| Share price1, 3 | 78.64 | 69.63 | 68.65 | 86.72 | 77.12 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 8.08 | 8.29 | 10.57 | 17.50 | 16.85 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 Data adjusted for splits and stock dividends.
2 2017 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 5,494,000,000 ÷ 564,347,000 = 9.74
3 Closing price as at the filing date of Express Scripts Holding Co. Annual Report.
4 2017 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 78.64 ÷ 9.74 = 8.08
5 Click competitor name to see calculations.
Between 2013 and 2017, a significant divergence is observed between the growth of operational profitability and the market valuation multiple. While operating earnings per share grew consistently, the valuation multiple contracted substantially over the same period.
- Operating Profitability Trend
- Operating profit per share exhibited a strong and uninterrupted upward trajectory. From a base of 4.58 US$ in 2013, the figure increased every year, reaching 9.74 US$ by December 31, 2017. This represents an increase of approximately 112% over the five-year span, indicating a significant expansion in core operational efficiency.
- Share Price Movement
- The share price demonstrated volatility without a clear linear trend. After an initial increase to 86.72 US$ in 2014, the price experienced a sharp decline to 68.65 US$ in 2015. A subsequent recovery occurred over the following two years, with the price ending at 78.64 US$ in 2017. Despite the recovery, the final share price remained below the 2014 peak.
- P/OP Ratio Analysis
- The Price to Operating Profit (P/OP) ratio underwent a marked contraction. The ratio peaked at 17.50 in 2014 before falling sharply to 10.57 in 2015, and continuing a downward trend to close at 8.08 in 2017. This decline indicates a compression in the valuation multiple, meaning the market attributed less value to each dollar of operating profit over time.
The synthesis of these trends reveals that the substantial growth in operating profit per share was not matched by a corresponding increase in the share price. As a result, the equity became progressively cheaper relative to its operating earnings, shifting from a high-multiple valuation in 2013 and 2014 to a significantly lower multiple by 2017.
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Price to Sales (P/S)
Express Scripts Holding Co., historical P/S calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 564,347,000 | 605,720,000 | 668,046,000 | 726,898,000 | 776,032,000 | |
| Selected Financial Data (US$) | ||||||
| Revenues (in thousands) | 100,064,600) | 100,287,500) | 101,751,800) | 100,887,100) | 104,098,800) | |
| Sales per share2 | 177.31 | 165.57 | 152.31 | 138.79 | 134.14 | |
| Share price1, 3 | 78.64 | 69.63 | 68.65 | 86.72 | 77.12 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 0.44 | 0.42 | 0.45 | 0.62 | 0.57 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 Data adjusted for splits and stock dividends.
2 2017 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= 100,064,600,000 ÷ 564,347,000 = 177.31
3 Closing price as at the filing date of Express Scripts Holding Co. Annual Report.
4 2017 Calculation
P/S ratio = Share price ÷ Sales per share
= 78.64 ÷ 177.31 = 0.44
5 Click competitor name to see calculations.
An analysis of the valuation multiples between 2013 and 2017 reveals a divergence between revenue growth and market valuation. While sales per share demonstrated consistent upward momentum, the Price to Sales (P/S) ratio experienced a general decline and subsequent stabilization at a lower level.
- Sales per Share Trend
- A steady and uninterrupted increase in sales per share is observed throughout the five-year period. Starting at 134.14 US$ in 2013, the figure rose annually to reach 177.31 US$ by December 31, 2017. This represents a consistent growth in top-line efficiency relative to the number of shares outstanding.
- Share Price Volatility
- The share price exhibited significant fluctuations. An initial increase from 77.12 US$ in 2013 to a peak of 86.72 US$ in 2014 was followed by a sharp decline to 68.65 US$ in 2015. A gradual recovery occurred over the following two years, with the price closing at 78.64 US$ in 2017.
- Price to Sales (P/S) Ratio Interpretation
- The P/S ratio peaked at 0.62 in 2014, coinciding with the highest share price of the period. Following 2014, a notable contraction occurred, with the ratio dropping to 0.45 in 2015 and reaching a low of 0.42 in 2016, before slightly adjusting to 0.44 in 2017. This downward trend in the multiple indicates that the market assigned a lower valuation to each dollar of revenue generated in the latter part of the period compared to the beginning, despite the actual increase in sales per share.
The overall data suggests that the expansion in revenue per share was not mirrored by a corresponding increase in the valuation multiple. The contraction of the P/S ratio from its 2014 peak suggests a shift in market sentiment or a compression of valuation multiples within the sector, as the share price did not keep pace with the robust growth in sales.
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Price to Book Value (P/BV)
Express Scripts Holding Co., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 564,347,000 | 605,720,000 | 668,046,000 | 726,898,000 | 776,032,000 | |
| Selected Financial Data (US$) | ||||||
| Total Express Scripts stockholders’ equity (in thousands) | 18,119,600) | 16,236,000) | 17,372,800) | 20,054,200) | 21,837,400) | |
| Book value per share (BVPS)2 | 32.11 | 26.80 | 26.01 | 27.59 | 28.14 | |
| Share price1, 3 | 78.64 | 69.63 | 68.65 | 86.72 | 77.12 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 2.45 | 2.60 | 2.64 | 3.14 | 2.74 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 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).
1 Data adjusted for splits and stock dividends.
2 2017 Calculation
BVPS = Total Express Scripts stockholders’ equity ÷ No. shares of common stock outstanding
= 18,119,600,000 ÷ 564,347,000 = 32.11
3 Closing price as at the filing date of Express Scripts Holding Co. Annual Report.
4 2017 Calculation
P/BV ratio = Share price ÷ BVPS
= 78.64 ÷ 32.11 = 2.45
5 Click competitor name to see calculations.
The Price to Book Value (P/BV) ratio exhibited a peak in 2014 followed by a consistent downward trajectory through 2017. While the market price per share experienced volatility, the overall trend in the P/BV ratio indicates a gradual contraction in the premium investors were willing to pay relative to the company's net asset value.
- P/BV Ratio Trends
- The P/BV ratio increased from 2.74 in 2013 to a peak of 3.14 in 2014, marking the highest valuation multiple within the analyzed period. Subsequently, a steady decline occurred, with the ratio falling to 2.64 in 2015, 2.60 in 2016, and reaching a period low of 2.45 by the end of 2017.
- Book Value Per Share (BVPS) Dynamics
- The book value per share showed a period of moderate decline between 2013 and 2015, moving from 28.14 US$ to 26.01 US$. However, a recovery phase began in 2016, culminating in a significant increase to 32.11 US$ in 2017. This growth in underlying book value contributed to the reduction of the P/BV ratio in the final year, as the asset base grew more rapidly than the share price.
- Share Price Influence on Valuation
- Share price movements were the primary driver of the P/BV peak in 2014, where a price increase to 86.72 US$ occurred despite a slight decrease in BVPS. In the subsequent years, the share price remained relatively suppressed compared to the 2014 peak, settling at 78.64 US$ in 2017. The convergence of a recovering share price and a substantially higher book value resulted in a lower valuation multiple by the end of the five-year period.
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