Price to Operating Profit (P/OP)
since 2005
Calculation
Yahoo! Inc., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Income (loss) from operations1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Mar 1, 2017 | — | = | 46.24 | ÷ | -0.67 | -0.67 | = | -645,058 | ÷ | 956,487,217 | |
| Feb 29, 2016 | — | = | 31.79 | ÷ | -5.02 | -5.02 | = | -4,748,494 | ÷ | 946,811,547 | |
| Feb 27, 2015 | 289.99 | = | 44.28 | ÷ | 0.15 | 0.15 | = | 142,942 | ÷ | 936,120,954 | |
| Feb 28, 2014 | 66.17 | = | 38.67 | ÷ | 0.58 | 0.58 | = | 589,926 | ÷ | 1,009,392,339 | |
| Mar 1, 2013 | 42.66 | = | 21.94 | ÷ | 0.51 | 0.51 | = | 566,368 | ÷ | 1,101,295,389 | |
| Feb 29, 2012 | 22.49 | = | 14.83 | ÷ | 0.66 | 0.66 | = | 800,341 | ÷ | 1,213,749,472 | |
| Feb 28, 2011 | 27.80 | = | 16.40 | ÷ | 0.59 | 0.59 | = | 772,524 | ÷ | 1,309,412,235 | |
| Feb 26, 2010 | 55.44 | = | 15.31 | ÷ | 0.28 | 0.28 | = | 386,692 | ÷ | 1,400,201,879 | |
| Feb 27, 2009 | 1,422.92 | = | 13.23 | ÷ | 0.01 | 0.01 | = | 12,963 | ÷ | 1,394,201,105 | |
| Feb 27, 2008 | 54.55 | = | 28.37 | ÷ | 0.52 | 0.52 | = | 695,413 | ÷ | 1,337,165,049 | |
| Feb 23, 2007 | 46.28 | = | 32.10 | ÷ | 0.69 | 0.69 | = | 940,966 | ÷ | 1,356,539,645 | |
| Mar 3, 2006 | 40.26 | = | 31.45 | ÷ | 0.78 | 0.78 | = | 1,107,725 | ÷ | 1,417,852,971 |
Based on: 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), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Yahoo! Inc. Annual Report.
The financial data reveals a period of significant volatility in both valuation and operational profitability between 2006 and 2017. While the share price exhibited cyclical fluctuations, the operating profit per share showed a long-term deteriorating trend, eventually transitioning into negative territory, which rendered the Price to Operating Profit (P/OP) ratio unsustainable in the final years of the period.
- Share Price Performance
- The share price experienced a notable decline from 31.45 US$ in 2006 to a low of 13.23 US$ in 2009. A recovery phase followed, with the price peaking at 44.28 US$ in 2015 and reaching its highest recorded value of 46.24 US$ in 2017, despite a temporary contraction to 31.79 US$ in 2016.
- Operating Profitability Trends
- Operating profit per share demonstrated a general downward trajectory. After starting at 0.78 US$ in 2006, profits plummeted to a marginal 0.01 US$ by 2009. Although a moderate recovery occurred between 2010 and 2014, peaking at 0.58 US$, profitability collapsed sharply thereafter, resulting in a substantial loss of -5.02 US$ in 2016 and -0.67 US$ in 2017.
- Price to Operating Profit (P/OP) Analysis
- The P/OP ratio exhibited extreme instability, primarily driven by fluctuations in operating profit rather than share price movements. A critical anomaly occurred in 2009, where the ratio spiked to 1,422.92 as operating profit nearly vanished. A similar pattern emerged in 2015, with the ratio climbing to 289.99 as profits fell to 0.15 US$. In 2016 and 2017, the P/OP ratio could not be calculated due to the transition to negative operating profits.
- Correlation Observations
- An inverse relationship is observed between operating profit and the P/OP ratio; as profitability diminished, the ratio expanded exponentially, indicating a decoupling of market valuation from operational earnings. The final years of the sequence highlight a fundamental shift where the company ceased to generate operating profits, leading to the disappearance of the P/OP metric as a meaningful valuation tool.
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Comparison to Competitors
Yahoo! Inc., P/OP, long-term trends, comparison to competitors
| Yahoo! Inc. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | Datadog Inc. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Mar 1, 2017 | — | 15.44 | 36.62 | — | 33.61 | — | 23.33 | 21.70 | 13.09 | — | — | 411.51 | — | 28.34 | — |
| Feb 29, 2016 | — | 15.66 | 49.21 | — | 22.23 | — | 31.60 | 20.57 | 12.84 | — | — | — | — | 25.82 | — |
| Feb 27, 2015 | 289.99 | 11.94 | 86.32 | — | 26.17 | — | 18.25 | 12.81 | 12.12 | — | — | — | — | 26.04 | — |
| Feb 28, 2014 | 66.17 | 11.50 | 71.49 | — | 22.85 | — | 15.12 | 9.91 | 9.51 | — | — | — | — | 24.81 | — |
| Mar 1, 2013 | 42.66 | 11.84 | 16.04 | — | 18.94 | — | 15.05 | 11.23 | 9.91 | — | 1,147.44 | — | — | 25.46 | — |
| Feb 29, 2012 | 22.49 | 11.55 | 14.01 | — | 26.88 | — | 14.19 | 8.55 | 13.61 | — | — | 166.46 | — | 18.21 | — |
| Feb 28, 2011 | 27.80 | 10.76 | 17.20 | — | — | — | 16.51 | 9.27 | 11.95 | — | — | 83.25 | — | 22.01 | — |
| Feb 26, 2010 | 55.44 | 10.49 | 26.10 | — | — | — | 13.11 | 10.42 | 12.94 | — | — | 59.54 | — | 15.18 | — |
| Feb 27, 2009 | 1,422.92 | 7.72 | 10.04 | — | — | — | 15.15 | 10.44 | 13.68 | — | — | 350.81 | — | 11.75 | — |
| Feb 27, 2008 | 54.55 | 12.16 | 22.98 | — | 9.72 | — | 15.13 | 56.63 | 16.87 | — | — | — | — | 32.49 | — |
| Feb 23, 2007 | 46.28 | 14.25 | 41.03 | — | 26.13 | — | 20.38 | 48.35 | 16.72 | — | — | 214.74 | — | 131.87 | — |
| Mar 3, 2006 | 40.26 | 10.72 | 31.95 | — | 43.13 | — | 15.31 | 59.14 | 17.01 | — | — | 233.65 | — | — | — |
Based on: 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), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).