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
Warner Bros. Discovery Inc., current price multiples
| Warner Bros. Discovery Inc. | Alphabet Inc. | Comcast Corp. | Meta Platforms Inc. | Netflix Inc. | Walt Disney Co. | Media & Entertainment | Communication Services | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||
| Current share price (P) | $10.43 | ||||||||||
| No. shares of common stock outstanding | 2,428,396,015 | ||||||||||
| Growth rate (g) | 9.33% | ||||||||||
| Earnings per share (EPS) | $0.41 | ||||||||||
| Next year expected EPS | $0.45 | ||||||||||
| Operating profit per share | $0.83 | ||||||||||
| Sales per share | $5.02 | ||||||||||
| Book value per share (BVPS) | $4.78 | ||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||
| Price to earnings (P/E) | 25.18 | 22.95 | 7.42 | 30.21 | 56.51 | 42.16 | 36.61 | 31.10 | |||
| Price to next year expected earnings | 23.03 | 18.30 | 6.87 | 23.86 | 43.85 | 41.50 | 31.01 | 27.80 | |||
| Price-earnings-growth (PEG) | 2.70 | 0.90 | 0.94 | 1.13 | 1.96 | 26.82 | 2.03 | 2.62 | |||
| Price to operating profit (P/OP) | 12.59 | 20.44 | 5.15 | 27.16 | 47.26 | 25.20 | 32.18 | 25.90 | |||
| Price to sales (P/S) | 2.08 | 6.56 | 0.97 | 11.45 | 12.62 | 2.29 | 8.49 | 5.81 | |||
| Price to book value (P/BV) | 2.18 | 7.07 | 1.40 | 10.32 | 19.90 | 2.08 | 8.67 | 6.32 | |||
Based on: 10-K (reporting date: 2021-12-31).
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)
Warner Bros. Discovery Inc., historical price multiples
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Price to earnings (P/E) ratio
- The P/E ratio exhibits significant fluctuations over the observed period. It was absent in 2017 but sharply decreased from 25.65 in 2018 to a low of 6.21 in 2019, indicating a relative undervaluation or increased earnings. The ratio then increased again to 22.1 in 2020 before declining to 13.95 in 2021. This volatility suggests varying investor expectations or earnings performance during these years.
- Price to operating profit (P/OP) ratio
- This ratio follows a downward trend from 13.03 in 2017 to 4.27 in 2019, signifying improving operating profitability relative to price. However, it rises noticeably to 10.71 in 2020, indicating a possible dip in operating earnings or increased share price, before decreasing again to 6.98 in 2021. The pattern reflects some instability in operating performance or market valuation across the years.
- Price to sales (P/S) ratio
- The P/S ratio presents a relatively stable trend with moderate variation. Starting at 1.35 in 2017, it slightly increased to 1.44 in 2018, then decreased to 1.15 in 2019. A significant spike to 2.53 occurs in 2020, indicating increased market valuation compared to sales, followed by a return to 1.15 in 2021. This spike may reflect transient market optimism or a change in sales dynamics during 2020.
- Price to book value (P/BV) ratio
- The P/BV ratio generally declines over the period. Beginning at 2.01 in 2017, it slightly decreases to 1.82 in 2018, continues down to 1.3 in 2019, then rises to 2.57 in 2020 before falling to 1.21 in 2021. The peak in 2020 suggests a temporary increase in market valuation relative to book value, while the overall decline implies a trend toward a lower premium on net asset value.
Price to Earnings (P/E)
Warner Bros. Discovery Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 506,245,821 | 487,334,195 | 520,922,321 | 523,978,060 | 381,907,924 | |
| Selected Financial Data (US$) | ||||||
| Net income (loss) available to Discovery, Inc. (in millions) | 1,006) | 1,219) | 2,069) | 594) | (337) | |
| Earnings per share (EPS)2 | 1.99 | 2.50 | 3.97 | 1.13 | -0.88 | |
| Share price1, 3 | 27.73 | 55.29 | 24.67 | 29.08 | 24.32 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 13.95 | 22.10 | 6.21 | 25.65 | — | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Alphabet Inc. | 25.74 | 34.65 | — | — | — | |
| Comcast Corp. | 16.01 | 22.37 | — | — | — | |
| Meta Platforms Inc. | 16.44 | 25.89 | — | — | — | |
| Netflix Inc. | 33.56 | 86.39 | — | — | — | |
| Walt Disney Co. | 137.89 | — | 23.96 | — | — | |
| P/E Ratio, Sector | ||||||
| Media & Entertainment | 23.98 | 36.25 | — | — | — | |
| P/E Ratio, Industry | ||||||
| Communication Services | 21.07 | 36.50 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income (loss) available to Discovery, Inc. ÷ No. shares of common stock outstanding
= 1,006,000,000 ÷ 506,245,821 = 1.99
3 Closing price as at the filing date of Warner Bros. Discovery Inc. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 27.73 ÷ 1.99 = 13.95
5 Click competitor name to see calculations.
- Share Price
- The share price displayed significant fluctuations over the five-year period. Starting at $24.32 at the end of 2017, it increased moderately to $29.08 in 2018 before experiencing a decline to $24.67 in 2019. A notable surge occurred in 2020 when the price more than doubled to $55.29. However, this increase was not sustained, as the share price decreased to $27.73 by the end of 2021. The volatility indicates periods of both investor optimism and caution.
- Earnings per Share (EPS)
- The EPS figures show an overall improvement from negative to positive values, indicating a turnaround in profitability. The EPS was negative at -$0.88 in 2017, followed by a substantial rise to $1.13 in 2018. The upward trend continued sharply to $3.97 in 2019, suggesting strong earnings growth. However, EPS declined to $2.50 in 2020 and further to $1.99 in 2021, reflecting some erosion in earnings after the peak year. Despite this decline, the company maintained profitability throughout the latter years.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio was not available for 2017 but became measurable from 2018 onwards. In 2018, the ratio stood at 25.65, reflecting relatively high market expectations compared to earnings. It dropped sharply to 6.21 in 2019, aligning with the peak in EPS and suggesting that the stock price was low relative to earnings at that time. In 2020, the P/E ratio increased again to 22.1, coinciding with the surge in share price but declining EPS. By 2021, the P/E ratio fell to 13.95, consistent with a reduction in both share price and EPS, indicating a moderation of market valuation relative to earnings.
- Summary of Trends
- Overall, the data exhibits a period of earnings recovery and stabilization from 2017 through 2019, followed by increased stock price volatility and some earnings contraction in 2020 and 2021. The fluctuations in P/E ratio correspond to the interplay between share price movements and changing earnings, suggesting shifting market perceptions of growth potential and risk. The company's financial performance improved markedly after 2017 but faced challenges maintaining the highest levels of profitability and market valuation in the more recent years.
Price to Operating Profit (P/OP)
Warner Bros. Discovery Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 506,245,821 | 487,334,195 | 520,922,321 | 523,978,060 | 381,907,924 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | 2,012) | 2,515) | 3,009) | 1,934) | 713) | |
| Operating profit per share2 | 3.97 | 5.16 | 5.78 | 3.69 | 1.87 | |
| Share price1, 3 | 27.73 | 55.29 | 24.67 | 29.08 | 24.32 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 6.98 | 10.71 | 4.27 | 7.88 | 13.03 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Alphabet Inc. | 24.86 | 33.85 | — | — | — | |
| Comcast Corp. | 10.89 | 13.47 | — | — | — | |
| Meta Platforms Inc. | 13.84 | 23.10 | — | — | — | |
| Netflix Inc. | 27.71 | 52.02 | — | — | — | |
| Walt Disney Co. | 91.54 | — | 24.82 | — | — | |
| P/OP Ratio, Sector | ||||||
| Media & Entertainment | 21.08 | 30.78 | — | — | — | |
| P/OP Ratio, Industry | ||||||
| Communication Services | 17.55 | 25.62 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 2,012,000,000 ÷ 506,245,821 = 3.97
3 Closing price as at the filing date of Warner Bros. Discovery Inc. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 27.73 ÷ 3.97 = 6.98
5 Click competitor name to see calculations.
The analysis of the provided financial data reveals notable trends in the share price, operating profit per share, and the price-to-operating profit (P/OP) ratio over the five-year period from 2017 to 2021.
- Share Price
- The share price began at $24.32 in 2017 and showed a general upward movement, reaching a peak of $55.29 in 2020. However, this increase was followed by a significant decline to $27.73 in 2021. The trajectory indicates volatility, with a marked surge in 2020 likely driven by strong performance or market factors, and a subsequent correction or market adjustment in 2021.
- Operating Profit Per Share
- The operating profit per share demonstrated a steady upward trend from $1.87 in 2017 to a peak of $5.78 in 2019, indicating continuous improvement in operational efficiency or profitability. Despite this peak, the figure declined slightly to $5.16 in 2020 and further to $3.97 in 2021. This decline suggests challenges in maintaining prior growth levels in operating profit, possibly due to external or internal factors impacting profitability.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio showed a decreasing trend from 13.03 in 2017 to 4.27 in 2019, reflecting a rising operating profit relative to share price or a more attractive valuation at that time. In 2020, the ratio increased sharply to 10.71, coinciding with the share price peak but a decline in operating profit per share, indicating the share price may have been overvalued relative to operating earnings. In 2021, the ratio decreased again to 6.98, reflecting both the drop in share price and operating profit per share, suggesting a partial normalization of valuation relative to operating performance.
Price to Sales (P/S)
Warner Bros. Discovery Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 506,245,821 | 487,334,195 | 520,922,321 | 523,978,060 | 381,907,924 | |
| Selected Financial Data (US$) | ||||||
| Revenues (in millions) | 12,191) | 10,671) | 11,144) | 10,553) | 6,873) | |
| Sales per share2 | 24.08 | 21.90 | 21.39 | 20.14 | 18.00 | |
| Share price1, 3 | 27.73 | 55.29 | 24.67 | 29.08 | 24.32 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 1.15 | 2.53 | 1.15 | 1.44 | 1.35 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Alphabet Inc. | 7.60 | 7.65 | — | — | — | |
| Comcast Corp. | 1.95 | 2.28 | — | — | — | |
| Meta Platforms Inc. | 5.49 | 8.78 | — | — | — | |
| Netflix Inc. | 5.78 | 9.54 | — | — | — | |
| Walt Disney Co. | 4.08 | 4.13 | 3.81 | — | — | |
| P/S Ratio, Sector | ||||||
| Media & Entertainment | 5.56 | 6.26 | — | — | — | |
| P/S Ratio, Industry | ||||||
| Communication Services | 3.94 | 4.19 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= 12,191,000,000 ÷ 506,245,821 = 24.08
3 Closing price as at the filing date of Warner Bros. Discovery Inc. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 27.73 ÷ 24.08 = 1.15
5 Click competitor name to see calculations.
Analysis of the financial data reveals several notable trends and fluctuations over the five-year period.
- Share Price
- The share price demonstrated volatility throughout the analyzed years. It initially increased from $24.32 at the end of 2017 to a peak of $29.08 in 2018, then declined to $24.67 in 2019. A significant surge occurred in 2020 when the share price more than doubled to $55.29. However, this was followed by a substantial decrease to $27.73 in 2021, indicating instability and potential market or company-specific events influencing the price.
- Sales Per Share
- Sales per share exhibited a consistent upward trend across all years. Starting at $18.00 in 2017, it incrementally rose each year, reaching $24.08 by the end of 2021. This steady growth suggests progressive improvement in revenue generation on a per-share basis, demonstrating that operational performance may have strengthened steadily despite the share price fluctuations.
- Price to Sales (P/S) Ratio
- The P/S ratio generally followed the pattern of the share price but with some deviations. It started at 1.35 in 2017 and slightly increased to 1.44 in 2018. It then declined to 1.15 in 2019, signaling a potential revaluation of the stock relative to sales. A pronounced spike to 2.53 occurred in 2020, mirroring the share price surge, which suggests the market priced the stock significantly higher compared to its sales that year. In 2021, the ratio dropped back to 1.15, coinciding with both the decline in share price and continued growth in sales, indicating a market correction or reassessment of valuation.
Overall, the data indicates that while sales per share showed consistent growth, the share price and P/S ratio experienced considerable volatility, particularly in 2020 and 2021. This divergence highlights potential market perception shifts or external factors impacting investor sentiment, not fully reflected in operational sales growth.
Price to Book Value (P/BV)
Warner Bros. Discovery Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 506,245,821 | 487,334,195 | 520,922,321 | 523,978,060 | 381,907,924 | |
| Selected Financial Data (US$) | ||||||
| Total Discovery, Inc. stockholders’ equity (in millions) | 11,599) | 10,464) | 9,891) | 8,386) | 4,610) | |
| Book value per share (BVPS)2 | 22.91 | 21.47 | 18.99 | 16.00 | 12.07 | |
| Share price1, 3 | 27.73 | 55.29 | 24.67 | 29.08 | 24.32 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 1.21 | 2.57 | 1.30 | 1.82 | 2.01 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Alphabet Inc. | 7.78 | 6.27 | — | — | — | |
| Comcast Corp. | 2.36 | 2.61 | — | — | — | |
| Meta Platforms Inc. | 5.18 | 5.88 | — | — | — | |
| Netflix Inc. | 10.83 | 21.56 | — | — | — | |
| Walt Disney Co. | 3.11 | 3.23 | 2.98 | — | — | |
| P/BV Ratio, Sector | ||||||
| Media & Entertainment | 5.68 | 5.40 | — | — | — | |
| P/BV Ratio, Industry | ||||||
| Communication Services | 4.28 | 4.19 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Total Discovery, Inc. stockholders’ equity ÷ No. shares of common stock outstanding
= 11,599,000,000 ÷ 506,245,821 = 22.91
3 Closing price as at the filing date of Warner Bros. Discovery Inc. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 27.73 ÷ 22.91 = 1.21
5 Click competitor name to see calculations.
The financial data over the five-year period reveals several notable trends and shifts in the share price, book value per share (BVPS), and the price-to-book value (P/BV) ratio.
- Share Price
- The share price exhibits fluctuations throughout the observed years. Beginning at $24.32, there is an increase to $29.08 in 2018, followed by a slight decline to $24.67 in 2019. In 2020, the share price surged significantly to $55.29, indicating a substantial market valuation increase. However, this peak was not sustained, as the price dropped to $27.73 in 2021, nearly returning to previous levels.
- Book Value per Share (BVPS)
- BVPS shows a consistent upward trajectory, rising from $12.07 in 2017 to $22.91 in 2021. This steady growth reflects an increase in the company's net asset value attributable to each share, suggesting improvements in the underlying equity base.
- Price-to-Book Value Ratio (P/BV)
- The P/BV ratio trends downward overall, starting at 2.01 in 2017 and decreasing to 1.21 by 2021. Notably, the ratio dropped sharply from 1.82 in 2018 to 1.3 in 2019, then peaked at 2.57 in 2020 before declining again. The fluctuation in P/BV primarily mirrors the volatility in share price relative to the steadily increasing book value per share.
In summary, the underlying book value per share demonstrates consistent growth over the period, indicating a strengthening balance sheet. Conversely, the share price and P/BV ratio reflect greater volatility, peaking markedly in 2020 before settling closer to earlier levels in 2021. This suggests market valuation fluctuations that may be influenced by external factors or investor sentiment, while the core equity value has steadily improved.