Price to Sales (P/S)
since 2015
Calculation
Kraft Heinz Co., P/S, long-term trends, calculation
| P/S | = | Share price1, 2, 3 | ÷ | Sales per share1 | Sales per share1 | = | Net sales1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 14, 2020 | 1.31 | = | 26.88 | ÷ | 20.45 | 20.45 | = | 24,977 | ÷ | 1,221,399,549 | |
| Jun 7, 2019 | 1.33 | = | 28.74 | ÷ | 21.53 | 21.53 | = | 26,268 | ÷ | 1,219,938,804 | |
| Feb 16, 2018 | 3.29 | = | 70.80 | ÷ | 21.52 | 21.52 | = | 26,232 | ÷ | 1,218,801,890 | |
| Feb 23, 2017 | 4.27 | = | 92.94 | ÷ | 21.76 | 21.76 | = | 26,487 | ÷ | 1,217,136,057 | |
| Mar 3, 2016 | 5.13 | = | 77.37 | ÷ | 15.09 | 15.09 | = | 18,338 | ÷ | 1,215,189,526 |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Kraft Heinz Co. Annual Report.
A consistent and significant downward trend in the Price to Sales (P/S) ratio is observed from March 2016 through February 2020. The ratio declined from a high of 5.13 to a low of 1.31, indicating a substantial contraction in the market valuation relative to the revenue generated per share.
- Share Price Volatility
- The share price exhibited significant instability, peaking at 92.94 US$ in February 2017 before experiencing a severe decline. The most precipitous drop occurred between February 2018 and June 2019, where the price fell from 70.80 US$ to 28.74 US$, representing a loss of approximately 59% of its value in a short period.
- Sales per Share Performance
- Sales per share showed an initial period of growth, rising from 15.09 US$ in March 2016 to 21.76 US$ in February 2017. Following this increase, sales remained relatively stagnant, fluctuating minimally between 2017 and 2019 before experiencing a slight decrease to 20.45 US$ by February 2020.
- P/S Ratio Compression
- The contraction of the P/S ratio was driven primarily by the collapse in share price rather than a decline in sales performance. While sales per share remained higher in 2020 than in 2016, the market valuation plummeted. The ratio decreased steadily from 5.13 in 2016 to 4.27 in 2017 and 3.29 in 2018, before dropping sharply to 1.33 in June 2019 and stabilizing at 1.31 in February 2020.
The divergence between stable sales per share and a declining share price suggests a fundamental shift in investor sentiment or an increase in perceived risk, resulting in a lower multiple being applied to the company's revenue.
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Comparison to Competitors
Kraft Heinz Co., P/S, long-term trends, comparison to competitors
| Kraft Heinz Co. | Coca-Cola Co. | Mondelēz International Inc. | PepsiCo Inc. | Philip Morris International Inc. | |
|---|---|---|---|---|---|
| Feb 14, 2020 | 1.31 | 6.75 | 3.25 | 3.03 | 4.57 |
| Jun 7, 2019 | 1.33 | 6.15 | 2.61 | 2.52 | 4.03 |
| Feb 16, 2018 | 3.29 | 5.31 | 2.42 | 2.51 | 5.57 |
| Feb 23, 2017 | 4.27 | 4.28 | 2.67 | 2.43 | 5.96 |
| Mar 3, 2016 | 5.13 | 4.32 | 2.11 | 2.22 | 5.28 |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
Comparison to Sector (Food, Beverage & Tobacco)
Kraft Heinz Co., P/S, long-term trends, comparison to sector (food, beverage & tobacco)
| Kraft Heinz Co. | Food, Beverage & Tobacco | |
|---|---|---|
| Feb 14, 2020 | 1.31 | 4.22 |
| Jun 7, 2019 | 1.33 | 3.59 |
| Feb 16, 2018 | 3.29 | 3.71 |
| Feb 23, 2017 | 4.27 | 3.56 |
| Mar 3, 2016 | 5.13 | 3.27 |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
Comparison to Industry (Consumer Staples)
Kraft Heinz Co., P/S, long-term trends, comparison to industry (consumer staples)
| Kraft Heinz Co. | Consumer Staples | |
|---|---|---|
| Feb 14, 2020 | 1.31 | 1.47 |
| Jun 7, 2019 | 1.33 | 1.24 |
| Feb 16, 2018 | 3.29 | 1.25 |
| Feb 23, 2017 | 4.27 | 1.26 |
| Mar 3, 2016 | 5.13 | 1.23 |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).