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
Yahoo! Inc., current price multiples
| Yahoo! Inc. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | Datadog Inc. | International Business Machines Corp. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||
| Current share price (P) | $49.49 | ||||||||||||||||
| No. shares of common stock outstanding | 958,198,997 | ||||||||||||||||
| Earnings per share (EPS) | $-0.22 | ||||||||||||||||
| Operating profit per share | $-0.67 | ||||||||||||||||
| Sales per share | $5.39 | ||||||||||||||||
| Book value per share (BVPS) | $32.40 | ||||||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||||||
| Price to sales (P/S) | 9.17 | 2.03 | 4.03 | 14.99 | 16.77 | 23.10 | 3.50 | 4.30 | 11.66 | 5.66 | 94.18 | 24.95 | 4.40 | 8.53 | 12.57 | 4.99 | |
| Price to book value (P/BV) | 1.53 | 4.77 | 8.24 | 38.49 | 16.23 | 21.22 | 7.24 | 4.85 | 8.75 | 8.98 | 57.06 | 10.42 | 3.09 | 8.74 | 3.13 | 6.11 | |
Based on: 10-K (reporting date: 2016-12-31).
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)
Yahoo! Inc., historical price multiples
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).
An analysis of the valuation multiples from 2012 to 2016 reveals significant volatility across earnings and profit-based metrics, contrasted with more stable but fluctuating revenue and asset-based valuations.
- Price to Earnings (P/E)
- The P/E ratio experienced extreme fluctuations between 2012 and 2014. A sharp increase from 6.12 to 28.57 occurred in 2013, followed by a steep decline to 5.51 in 2014. This pattern suggests substantial volatility in net income or rapid shifts in market sentiment during this period. Data for this metric is unavailable for 2015 and 2016.
- Price to Operating Profit (P/OP)
- A consistent and aggressive upward trend is observed in the P/OP ratio, which rose from 42.66 in 2012 to 289.99 by 2014. This exponential increase indicates a widening gap between the market price and the operating profit, suggesting that operating profits declined significantly relative to the share price. Data for this metric is unavailable for 2015 and 2016.
- Price to Sales (P/S)
- The P/S ratio trended upward from 4.85 in 2012 to a peak of 8.98 in 2014. A contraction to 6.06 was noted in 2015, followed by a recovery to 8.56 in 2016. This indicates that while the valuation relative to revenue fluctuated, the market generally assigned a higher multiple to sales in the later years of the period compared to 2012.
- Price to Book Value (P/BV)
- The P/BV ratio peaked at 2.99 in 2013 before dropping sharply to 1.07 in 2014 and 1.04 in 2015. A slight increase to 1.42 was recorded in 2016. The convergence toward 1.0x between 2014 and 2015 suggests the market valued the equity closely to its accounting book value during that interval.
Overall, the data indicates a period of instability in profitability-based valuation, characterized by a sharp rise in the P/OP ratio and erratic P/E movements, while the P/S and P/BV ratios reflect a broader shift in how the market priced the underlying assets and revenue streams.
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Price to Earnings (P/E)
Yahoo! Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 956,487,217 | 946,811,547 | 936,120,954 | 1,009,392,339 | 1,101,295,389 | |
| Selected Financial Data (US$) | ||||||
| Net income (loss) attributable to Yahoo! Inc. (in thousands) | (214,321) | (4,359,082) | 7,521,731) | 1,366,281) | 3,945,479) | |
| Earnings per share (EPS)2 | -0.22 | -4.60 | 8.03 | 1.35 | 3.58 | |
| Share price1, 3 | 46.24 | 31.79 | 44.28 | 38.67 | 21.94 | |
| Valuation Ratio | ||||||
| P/E ratio4 | — | — | 5.51 | 28.57 | 6.12 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Accenture PLC | — | — | — | — | — | |
| Adobe Inc. | — | — | — | — | — | |
| AppLovin Corp. | — | — | — | — | — | |
| Cadence Design Systems Inc. | — | — | — | — | — | |
| Datadog Inc. | — | — | — | — | — | |
| International Business Machines Corp. | — | — | — | — | — | |
| Intuit Inc. | — | — | — | — | — | |
| Microsoft Corp. | — | — | — | — | — | |
| Oracle Corp. | — | — | — | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | — | — | — | — | |
| Salesforce Inc. | — | — | — | — | — | |
| ServiceNow Inc. | — | — | — | — | — | |
| Synopsys Inc. | — | — | — | — | — | |
| Workday Inc. | — | — | — | — | — | |
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).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
EPS = Net income (loss) attributable to Yahoo! Inc. ÷ No. shares of common stock outstanding
= -214,321,000 ÷ 956,487,217 = -0.22
3 Closing price as at the filing date of Yahoo! Inc. Annual Report.
4 2016 Calculation
P/E ratio = Share price ÷ EPS
= 46.24 ÷ -0.22 = —
5 Click competitor name to see calculations.
The financial trajectory between 2012 and 2016 is characterized by significant volatility in earnings and a general appreciation in share price, resulting in highly inconsistent valuation multiples.
- Share Price Trends
- An overall upward trend in share price is observed, moving from 21.94 US$ in 2012 to 46.24 US$ by 2016. Despite this growth, a notable contraction occurred in 2015, where the price decreased to 31.79 US$ before rebounding to its peak value in the final year of the period.
- Earnings Per Share (EPS) Performance
- Earnings exhibited extreme instability. After starting at 3.58 US$ in 2012 and dipping in 2013, EPS reached a peak of 8.03 US$ in 2014. This positive momentum reversed sharply in 2015, with earnings falling to a loss of 4.60 US$, followed by a slight recovery to a smaller loss of 0.22 US$ in 2016.
- Price to Earnings (P/E) Ratio Dynamics
- The P/E ratio fluctuated drastically during the years earnings remained positive. In 2013, the ratio surged to 28.57, reflecting a divergence where the share price rose while earnings declined. Conversely, in 2014, the ratio compressed to 5.51 as earnings grew substantially relative to the price. For the years 2015 and 2016, the P/E ratio is not applicable as the company reported negative earnings per share.
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Price to Operating Profit (P/OP)
Yahoo! Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 956,487,217 | 946,811,547 | 936,120,954 | 1,009,392,339 | 1,101,295,389 | |
| Selected Financial Data (US$) | ||||||
| Income (loss) from operations (in thousands) | (645,058) | (4,748,494) | 142,942) | 589,926) | 566,368) | |
| Operating profit per share2 | -0.67 | -5.02 | 0.15 | 0.58 | 0.51 | |
| Share price1, 3 | 46.24 | 31.79 | 44.28 | 38.67 | 21.94 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | — | — | 289.99 | 66.17 | 42.66 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Accenture PLC | — | — | — | — | — | |
| Adobe Inc. | — | — | — | — | — | |
| AppLovin Corp. | — | — | — | — | — | |
| Cadence Design Systems Inc. | — | — | — | — | — | |
| Datadog Inc. | — | — | — | — | — | |
| International Business Machines Corp. | — | — | — | — | — | |
| Intuit Inc. | — | — | — | — | — | |
| Microsoft Corp. | — | — | — | — | — | |
| Oracle Corp. | — | — | — | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | — | — | — | — | |
| Salesforce Inc. | — | — | — | — | — | |
| ServiceNow Inc. | — | — | — | — | — | |
| Synopsys Inc. | — | — | — | — | — | |
| Workday Inc. | — | — | — | — | — | |
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).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
Operating profit per share = Income (loss) from operations ÷ No. shares of common stock outstanding
= -645,058,000 ÷ 956,487,217 = -0.67
3 Closing price as at the filing date of Yahoo! Inc. Annual Report.
4 2016 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 46.24 ÷ -0.67 = —
5 Click competitor name to see calculations.
The financial trajectory between 2012 and 2016 is characterized by a significant divergence between market valuation and operational profitability. While the share price generally trended upward over the period, operating profit per share experienced a severe decline, eventually transitioning into negative territory.
- Share Price Performance
- The share price exhibited volatility with an overall upward trend, rising from 21.94 US$ in 2012 to a peak of 46.24 US$ in 2016. A notable temporary decline occurred in 2015, where the price dropped to 31.79 US$ before recovering strongly the following year.
- Operating Profit per Share
- Operational efficiency deteriorated sharply over the five-year period. After a slight increase from 0.51 US$ in 2012 to 0.58 US$ in 2013, profits plummeted to 0.15 US$ in 2014. This downward trend culminated in substantial operating losses, reaching -5.02 US$ in 2015 and -0.67 US$ in 2016.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio reflects an increasing disconnect between the market price and operational earnings. The ratio rose from 42.66 in 2012 to 66.17 in 2013, before spiking to 289.99 in 2014. This extreme escalation in 2014 was driven by the combination of a rising share price and a collapsing operating profit. For the years 2015 and 2016, the ratio is non-calculable due to the transition to negative operating profits, rendering the multiple irrelevant for valuation purposes during those periods.
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Price to Sales (P/S)
Yahoo! Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 956,487,217 | 946,811,547 | 936,120,954 | 1,009,392,339 | 1,101,295,389 | |
| Selected Financial Data (US$) | ||||||
| Revenue (in thousands) | 5,169,135) | 4,968,301) | 4,618,133) | 4,680,380) | 4,986,566) | |
| Sales per share2 | 5.40 | 5.25 | 4.93 | 4.64 | 4.53 | |
| Share price1, 3 | 46.24 | 31.79 | 44.28 | 38.67 | 21.94 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 8.56 | 6.06 | 8.98 | 8.34 | 4.85 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Accenture PLC | — | — | — | — | — | |
| Adobe Inc. | — | — | — | — | — | |
| AppLovin Corp. | — | — | — | — | — | |
| Cadence Design Systems Inc. | — | — | — | — | — | |
| Datadog Inc. | — | — | — | — | — | |
| International Business Machines Corp. | — | — | — | — | — | |
| Intuit Inc. | — | — | — | — | — | |
| Microsoft Corp. | — | — | — | — | — | |
| Oracle Corp. | — | — | — | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | — | — | — | — | |
| Salesforce Inc. | — | — | — | — | — | |
| ServiceNow Inc. | — | — | — | — | — | |
| Synopsys Inc. | — | — | — | — | — | |
| Workday Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= 5,169,135,000 ÷ 956,487,217 = 5.40
3 Closing price as at the filing date of Yahoo! Inc. Annual Report.
4 2016 Calculation
P/S ratio = Share price ÷ Sales per share
= 46.24 ÷ 5.40 = 8.56
5 Click competitor name to see calculations.
An analysis of the valuation multiples between 2012 and 2016 reveals a period of significant volatility in the price-to-sales (P/S) ratio, primarily driven by fluctuations in share price rather than revenue performance.
- Revenue Performance
- Sales per share demonstrated consistent and steady growth throughout the five-year period, increasing from 4.53 US$ in 2012 to 5.40 US$ in 2016. This represents a stable, incremental upward trajectory in organic revenue generation per share.
- Share Price Volatility
- The share price exhibited substantial variance, starting at 21.94 US$ in 2012, peaking at 44.28 US$ in 2014, declining to 31.79 US$ in 2015, and reaching a period high of 46.24 US$ in 2016.
- P/S Ratio Dynamics
- The P/S ratio experienced a sharp expansion from 4.85 in 2012 to 8.98 in 2014, suggesting a significant increase in the market's valuation of each dollar of sales. A contraction occurred in 2015, with the ratio falling to 6.06, which coincided with a decline in share price despite continued growth in sales per share. By 2016, the ratio rebounded to 8.56, indicating a recovery in the valuation multiple to levels comparable to the 2013-2014 period.
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Price to Book Value (P/BV)
Yahoo! Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 956,487,217 | 946,811,547 | 936,120,954 | 1,009,392,339 | 1,101,295,389 | |
| Selected Financial Data (US$) | ||||||
| Total Yahoo! Inc. stockholders’ equity (in thousands) | 31,049,283) | 29,043,537) | 38,741,837) | 13,074,909) | 14,560,200) | |
| Book value per share (BVPS)2 | 32.46 | 30.68 | 41.39 | 12.95 | 13.22 | |
| Share price1, 3 | 46.24 | 31.79 | 44.28 | 38.67 | 21.94 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 1.42 | 1.04 | 1.07 | 2.99 | 1.66 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Accenture PLC | — | — | — | — | — | |
| Adobe Inc. | — | — | — | — | — | |
| AppLovin Corp. | — | — | — | — | — | |
| Cadence Design Systems Inc. | — | — | — | — | — | |
| Datadog Inc. | — | — | — | — | — | |
| International Business Machines Corp. | — | — | — | — | — | |
| Intuit Inc. | — | — | — | — | — | |
| Microsoft Corp. | — | — | — | — | — | |
| Oracle Corp. | — | — | — | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | — | — | — | — | |
| Salesforce Inc. | — | — | — | — | — | |
| ServiceNow Inc. | — | — | — | — | — | |
| Synopsys Inc. | — | — | — | — | — | |
| Workday Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
BVPS = Total Yahoo! Inc. stockholders’ equity ÷ No. shares of common stock outstanding
= 31,049,283,000 ÷ 956,487,217 = 32.46
3 Closing price as at the filing date of Yahoo! Inc. Annual Report.
4 2016 Calculation
P/BV ratio = Share price ÷ BVPS
= 46.24 ÷ 32.46 = 1.42
5 Click competitor name to see calculations.
The valuation metrics from 2012 to 2016 exhibit significant volatility in both market pricing and underlying book value, leading to fluctuating price-to-book multiples over the five-year period.
- Share Price Performance
- The share price demonstrated a general upward trajectory characterized by periodic fluctuations. After increasing from US$ 21.94 in 2012 to a high of US$ 44.28 in 2014, a contraction occurred in 2015, with the price dropping to US$ 31.79. A subsequent recovery led to a period peak of US$ 46.24 by the end of 2016.
- Book Value per Share (BVPS) Trends
- BVPS remained relatively stagnant between 2012 and 2013. However, a substantial increase was observed in 2014, where the value rose from US$ 12.95 to US$ 41.39. This sharp appreciation was followed by a decrease to US$ 30.68 in 2015 and a slight recovery to US$ 32.46 in 2016.
- Price to Book Value (P/BV) Analysis
- The P/BV ratio peaked at 2.99 in 2013, representing the highest market premium relative to book value. A sharp contraction followed in 2014 and 2015, with the ratio falling to 1.07 and 1.04 respectively; this decline was primarily driven by the significant expansion of the book value per share rather than a decline in share price. By 2016, the ratio increased to 1.42, reflecting a renewed market premium as share price growth outpaced the growth of the book value.
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