Price to Earnings (P/E)
since 2019
Calculation
Shockwave Medical Inc., P/E, long-term trends, calculation
| P/E | = | Share price1, 2, 3 | ÷ | Earnings per share1 (EPS) | EPS1 | = | Net income (loss)1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 26, 2024 | 65.99 | = | 259.89 | ÷ | 3.94 | 3.94 | = | 147,278 | ÷ | 37,396,816 | |
| Feb 27, 2023 | 32.02 | = | 189.52 | ÷ | 5.92 | 5.92 | = | 215,996 | ÷ | 36,495,387 | |
| Feb 25, 2022 | — | = | 175.59 | ÷ | -0.26 | -0.26 | = | -9,136 | ÷ | 35,653,563 | |
| Feb 26, 2021 | — | = | 116.76 | ÷ | -1.89 | -1.89 | = | -65,699 | ÷ | 34,842,744 | |
| Mar 12, 2020 | — | = | 29.00 | ÷ | -1.61 | -1.61 | = | -51,109 | ÷ | 31,765,657 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Shockwave Medical Inc. Annual Report.
The financial trajectory between March 2020 and February 2024 is characterized by a transition from negative earnings to profitability, accompanied by a consistent and significant appreciation in share price.
- Share Price Appreciation
- A sustained upward trend in the share price is observed, rising from 29.00 US$ in 2020 to 259.89 US$ by February 2024. The most substantial growth occurred between 2020 and 2021, with the price increasing more than fourfold, indicating strong market confidence and valuation growth preceding actual profitability.
- Earnings Per Share (EPS) Evolution
- The company experienced a period of net losses from 2020 through 2022, with EPS reaching a low of -1.89 US$ in 2021 before narrowing to -0.26 US$ in 2022. A pivotal shift to profitability occurred in February 2023, with EPS rising to 5.92 US$. However, a subsequent contraction in EPS to 3.94 US$ was recorded in February 2024.
- Price-to-Earnings (P/E) Ratio Dynamics
- The P/E ratio was not applicable for the first three years due to negative earnings. Upon achieving profitability in 2023, the P/E ratio was established at 32.02. By February 2024, the ratio expanded sharply to 65.99. This doubling of the P/E ratio is the result of a simultaneous increase in the share price and a decrease in earnings per share, suggesting that the market is attributing a significantly higher valuation multiple to the company's earnings.
The divergence between the declining EPS and the rising share price in the final period indicates that investor sentiment is driven by factors beyond immediate bottom-line performance, resulting in an aggressive expansion of the valuation multiple.
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Comparison to Competitors
Shockwave Medical Inc., P/E, long-term trends, comparison to competitors
| Shockwave Medical Inc. | Abbott Laboratories | Elevance Health Inc. | Intuitive Surgical Inc. | Medtronic PLC | UnitedHealth Group Inc. | |
|---|---|---|---|---|---|---|
| Feb 26, 2024 | 65.99 | 34.57 | 19.80 | 74.11 | 30.94 | 20.53 |
| Feb 27, 2023 | 32.02 | 26.76 | 9,358,713.46 | 64.99 | 23.38 | 22.46 |
| Feb 25, 2022 | — | 29.13 | 18.13 | 59.94 | 46.56 | 26.03 |
| Feb 26, 2021 | — | 48.49 | 15.87 | 87.47 | 26.30 | 20.54 |
| Mar 12, 2020 | — | 41.83 | 15.96 | 48.72 | 28.78 | 20.48 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
Comparison to Sector (Health Care Equipment & Services)
Shockwave Medical Inc., P/E, long-term trends, comparison to sector (health care equipment & services)
| Shockwave Medical Inc. | Health Care Equipment & Services | |
|---|---|---|
| Feb 26, 2024 | 65.99 | 25.86 |
| Feb 27, 2023 | 32.02 | 1,429,718.32 |
| Feb 25, 2022 | — | 28.98 |
| Feb 26, 2021 | — | 27.23 |
| Mar 12, 2020 | — | 25.22 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
Comparison to Industry (Health Care)
Shockwave Medical Inc., P/E, long-term trends, comparison to industry (health care)
| Shockwave Medical Inc. | Health Care | |
|---|---|---|
| Feb 26, 2024 | 65.99 | 30.62 |
| Feb 27, 2023 | 32.02 | 351,256.81 |
| Feb 25, 2022 | — | 21.55 |
| Feb 26, 2021 | — | 32.22 |
| Mar 12, 2020 | — | 22.09 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).