Price to Sales (P/S)
since 2012
Calculation
Kraft Foods Group Inc., P/S, long-term trends, calculation
| P/S | = | Share price1, 2, 3 | ÷ | Sales per share1 | Sales per share1 | = | Net revenues1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 19, 2015 | 2.07 | = | 64.17 | ÷ | 30.96 | 30.96 | = | 18,205 | ÷ | 587,988,695 | |
| Feb 21, 2014 | 1.80 | = | 55.09 | ÷ | 30.55 | 30.55 | = | 18,218 | ÷ | 596,311,563 | |
| Mar 21, 2013 | 1.67 | = | 51.66 | ÷ | 30.91 | 30.91 | = | 18,339 | ÷ | 593,372,593 |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Kraft Foods Group Inc. Annual Report.
An analysis of the valuation metrics from 2013 to 2015 reveals a consistent increase in the Price to Sales (P/S) ratio. This expansion in the valuation multiple occurs despite a lack of significant growth in top-line revenue on a per-share basis.
- Share Price Trends
- The share price demonstrated a steady upward trajectory, rising from 51.66 US$ in March 2013 to 64.17 US$ by February 2015. The most pronounced increase occurred between February 2014 and February 2015, where the price rose from 55.09 US$ to 64.17 US$.
- Sales per Share Performance
- Revenue generated per share remained essentially stagnant over the analyzed period. After starting at 30.91 US$ in 2013, there was a slight contraction to 30.55 US$ in 2014, followed by a recovery to 30.96 US$ in 2015. This indicates that the company did not experience meaningful growth in sales per share during this timeframe.
- Price to Sales (P/S) Ratio Interpretation
- The P/S ratio increased sequentially from 1.67 in 2013 to 1.80 in 2014, reaching 2.07 by 2015. Since the sales per share remained nearly constant, the expansion of the P/S ratio is driven entirely by the increase in the share price. This pattern suggests that the market assigned a higher premium to each dollar of sales over time, reflecting a valuation increase that was not supported by proportional revenue growth.
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Comparison to Competitors
Kraft Foods Group Inc., P/S, long-term trends, comparison to competitors
| Kraft Foods Group Inc. | lululemon athletica inc. | Nike Inc. | |
|---|---|---|---|
| Feb 19, 2015 | 2.07 | 4.68 | 2.43 |
| Feb 21, 2014 | 1.80 | 6.82 | 2.22 |
| Mar 21, 2013 | 1.67 | 10.89 | 1.76 |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
Comparison to Sector (Consumer Durables & Apparel)
Kraft Foods Group Inc., P/S, long-term trends, comparison to sector (consumer durables & apparel)
| Kraft Foods Group Inc. | Consumer Durables & Apparel | |
|---|---|---|
| Feb 19, 2015 | 2.07 | 2.55 |
| Feb 21, 2014 | 1.80 | 2.46 |
| Mar 21, 2013 | 1.67 | 2.12 |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
Comparison to Industry (Consumer Discretionary)
Kraft Foods Group Inc., P/S, long-term trends, comparison to industry (consumer discretionary)
| Kraft Foods Group Inc. | Consumer Discretionary | |
|---|---|---|
| Feb 19, 2015 | 2.07 | 1.32 |
| Feb 21, 2014 | 1.80 | 1.33 |
| Mar 21, 2013 | 1.67 | 1.06 |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).