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
Edwards Lifesciences Corp., current price multiples
| Edwards Lifesciences Corp. | Abbott Laboratories | CVS Health Corp. | Elevance Health Inc. | Intuitive Surgical Inc. | Medtronic PLC | UnitedHealth Group Inc. | Health Care Equipment & Services | Health Care | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||
| Current share price (P) | $107.73 | |||||||||||
| No. shares of common stock outstanding | 623,207,437 | |||||||||||
| Growth rate (g) | 22.69% | |||||||||||
| Earnings per share (EPS) | $2.41 | |||||||||||
| Next year expected EPS | $2.96 | |||||||||||
| Operating profit per share | $2.71 | |||||||||||
| Sales per share | $8.40 | |||||||||||
| Book value per share (BVPS) | $9.36 | |||||||||||
| Valuation Ratios (Price Multiples) | ||||||||||||
| Price to earnings (P/E) | 44.67 | 17.36 | 18.28 | 13.11 | 82.52 | 24.09 | 19.13 | 22.32 | 22.64 | |||
| Price to next year expected earnings | 36.41 | 15.79 | 17.50 | 11.69 | 73.01 | 23.72 | 16.63 | 20.37 | 20.76 | |||
| Price-earnings-growth (PEG) | 1.97 | 1.75 | 4.10 | 1.08 | 6.34 | 15.40 | 1.27 | 2.34 | 2.50 | |||
| Price to operating profit (P/OP) | 39.72 | 34.08 | 9.91 | 10.76 | 81.59 | 18.86 | 8.53 | 16.54 | 18.74 | |||
| Price to sales (P/S) | 12.83 | 5.55 | 0.23 | 0.45 | 22.95 | 3.35 | 0.70 | 1.23 | 2.81 | |||
| Price to book value (P/BV) | 11.50 | 4.88 | 1.12 | 1.90 | 11.66 | 2.34 | 2.97 | 3.46 | 5.38 | |||
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)
Edwards Lifesciences Corp., 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).
The financial ratios over the analyzed five-year period demonstrate several noteworthy trends in valuation and market expectations for the company.
- Price to Earnings (P/E) Ratio
- The P/E ratio exhibits variability with an initial increase from 48.16 in 2017 to a peak of 66.48 in 2020, followed by a significant decrease to 44.67 in 2021. This indicates that the market valuation relative to earnings rose markedly until 2020, suggesting heightened growth expectations or temporarily reduced earnings, then corrected downward in 2021, possibly reflecting normalized earnings or revised growth outlooks.
- Price to Operating Profit (P/OP) Ratio
- This ratio mirrors the P/E trend, starting at 25.66 in 2017, increasing sharply in 2018 to 49.37, and peaking at 60.98 in 2020. The subsequent decline to 39.72 in 2021 suggests a reassessment of the company's operating profitability valuation by the market, aligning with a moderation in investor optimism or improved operating profits relative to share price.
- Price to Sales (P/S) Ratio
- The P/S ratio shows a consistent upward trajectory throughout the period, increasing steadily from 8.18 in 2017 to 12.83 in 2021. This persistent increase indicates that investors have been willing to pay progressively higher multiples for each dollar of sales, reflecting strong revenue growth expectations and possibly an increasing valuation premium for sales expansion.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio remains relatively stable with minor fluctuations, rising from 9.51 in 2017 to 11.76 in 2018, maintaining similar levels through 2019 and 2020, and then slightly decreasing to 11.5 in 2021. This stability suggests that the market valuation relative to the company's book equity has been consistent, indicating steady investor confidence in the company's net asset value over the period.
Price to Earnings (P/E)
Edwards Lifesciences Corp., 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 | 623,207,437 | 624,518,873 | 627,367,734 | 623,298,987 | 630,071,124 | |
| Selected Financial Data (US$) | ||||||
| Net income (in thousands) | 1,503,100) | 823,400) | 1,046,900) | 722,200) | 583,600) | |
| Earnings per share (EPS)2 | 2.41 | 1.32 | 1.67 | 1.16 | 0.93 | |
| Share price1, 3 | 107.73 | 87.65 | 76.85 | 59.26 | 44.61 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 44.67 | 66.48 | 46.05 | 51.14 | 48.16 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Abbott Laboratories | 29.13 | 48.49 | — | — | — | |
| CVS Health Corp. | 17.39 | 12.88 | — | — | — | |
| Elevance Health Inc. | 18.13 | 15.87 | — | — | — | |
| Intuitive Surgical Inc. | 59.94 | 87.47 | — | — | — | |
| Medtronic PLC | 46.56 | 26.30 | — | — | — | |
| UnitedHealth Group Inc. | 26.03 | 20.54 | — | — | — | |
| P/E Ratio, Sector | ||||||
| Health Care Equipment & Services | 26.88 | 24.48 | — | — | — | |
| P/E Ratio, Industry | ||||||
| Health Care | 21.35 | 30.75 | — | — | — | |
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 ÷ No. shares of common stock outstanding
= 1,503,100,000 ÷ 623,207,437 = 2.41
3 Closing price as at the filing date of Edwards Lifesciences Corp. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 107.73 ÷ 2.41 = 44.67
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated a consistent upward trend over the five-year period. Beginning at $44.61 at the end of 2017, the price increased each year, reaching $107.73 by the end of 2021. This reflects a more than twofold increase, indicating strong investor confidence and positive market sentiment.
- Earnings per Share (EPS)
- The EPS showed overall growth despite some fluctuations. It increased from $0.93 in 2017 to $1.67 in 2019, indicating steady profitability improvement. A slight decrease occurred in 2020 to $1.32, but this was followed by a substantial rise to $2.41 in 2021, marking the highest value in the period and suggesting a strong recovery or growth in earnings capacity.
- Price-to-Earnings Ratio (P/E)
- The P/E ratio exhibited variability throughout the period. Starting at 48.16 in 2017, it increased slightly in 2018 to 51.14, then declined to 46.05 in 2019. A sharp rise occurred in 2020, reaching 66.48, indicating investors might have been expecting higher future earnings or were willing to pay a premium despite the dip in EPS that year. By 2021, the P/E ratio decreased to 44.67, the lowest in the period, suggesting a normalization or adjustment in valuation relative to earnings despite the spike in share price and EPS.
- Overall Insights
- The company experienced significant share price appreciation supported by rising EPS, particularly strong in the final year analyzed. The fluctuations in the P/E ratio suggest varying investor expectations and market valuation adjustments over time. The lower P/E in 2021, combined with high EPS and share price, may reflect improved profitability making the stock relatively more attractive or fairly valued compared to previous years.
Price to Operating Profit (P/OP)
Edwards Lifesciences Corp., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 623,207,437 | 624,518,873 | 627,367,734 | 623,298,987 | 630,071,124 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in thousands) | 1,690,300) | 897,600) | 1,146,800) | 748,200) | 1,095,500) | |
| Operating profit per share2 | 2.71 | 1.44 | 1.83 | 1.20 | 1.74 | |
| Share price1, 3 | 107.73 | 87.65 | 76.85 | 59.26 | 44.61 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 39.72 | 60.98 | 42.04 | 49.37 | 25.66 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Abbott Laboratories | 24.45 | 40.69 | — | — | — | |
| CVS Health Corp. | 10.43 | 6.65 | — | — | — | |
| Elevance Health Inc. | 15.70 | 12.10 | — | — | — | |
| Intuitive Surgical Inc. | 56.11 | 88.37 | — | — | — | |
| Medtronic PLC | 37.44 | 26.29 | — | — | — | |
| UnitedHealth Group Inc. | 18.77 | 14.12 | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Health Care Equipment & Services | 19.92 | 17.16 | — | — | — | |
| P/OP Ratio, Industry | ||||||
| Health Care | 17.67 | 22.32 | — | — | — | |
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
= 1,690,300,000 ÷ 623,207,437 = 2.71
3 Closing price as at the filing date of Edwards Lifesciences Corp. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 107.73 ÷ 2.71 = 39.72
5 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period ending December 31, 2021.
- Share Price
- The share price exhibits a consistent upward trajectory throughout the entire timeframe. Starting at $44.61 in 2017, it increased steadily each year, reaching $107.73 by the end of 2021. This represents a substantial appreciation, more than doubling over five years, indicating growing market confidence or strong company performance factors driving investor interest.
- Operating Profit Per Share (OPPS)
- The operating profit per share shows some variability but an overall upward trend. It started at $1.74 in 2017, declined to $1.20 in 2018, then rebounded to $1.83 in 2019. There was a slight decrease to $1.44 in 2020, followed by a significant increase to $2.71 in 2021, the highest level in the period analyzed. This pattern suggests some operational challenges or fluctuations in profitability during the earlier years, with a marked improvement in 2021.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio displays notable volatility. Beginning at 25.66 in 2017, it sharply rose to 49.37 in 2018, implying that share price growth outpaced increases in operating profit per share. Subsequently, it decreased to 42.04 in 2019, then rose again to a peak of 60.98 in 2020. By 2021, it dropped to 39.72, the lowest ratio observed since 2018. These fluctuations indicate shifting investor valuations relative to the company's operating profitability, with the 2021 decrease possibly reflecting improved operating performance relative to the share price.
Price to Sales (P/S)
Edwards Lifesciences Corp., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 623,207,437 | 624,518,873 | 627,367,734 | 623,298,987 | 630,071,124 | |
| Selected Financial Data (US$) | ||||||
| Net sales (in thousands) | 5,232,500) | 4,386,300) | 4,348,000) | 3,722,800) | 3,435,300) | |
| Sales per share2 | 8.40 | 7.02 | 6.93 | 5.97 | 5.45 | |
| Share price1, 3 | 107.73 | 87.65 | 76.85 | 59.26 | 44.61 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 12.83 | 12.48 | 11.09 | 9.92 | 8.18 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Abbott Laboratories | 4.78 | 6.30 | — | — | — | |
| CVS Health Corp. | 0.47 | 0.35 | — | — | — | |
| Elevance Health Inc. | 0.81 | 0.60 | — | — | — | |
| Intuitive Surgical Inc. | 17.89 | 21.29 | — | — | — | |
| Medtronic PLC | 5.57 | 4.36 | — | — | — | |
| UnitedHealth Group Inc. | 1.58 | 1.24 | — | — | — | |
| P/S Ratio, Sector | ||||||
| Health Care Equipment & Services | 1.48 | 1.29 | — | — | — | |
| P/S Ratio, Industry | ||||||
| Health Care | 2.65 | 2.59 | — | — | — | |
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 = Net sales ÷ No. shares of common stock outstanding
= 5,232,500,000 ÷ 623,207,437 = 8.40
3 Closing price as at the filing date of Edwards Lifesciences Corp. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 107.73 ÷ 8.40 = 12.83
5 Click competitor name to see calculations.
- Share Price Trends
- The share price exhibited a consistent upward trajectory from 2017 to 2021. Starting at $44.61 in 2017, it increased annually to reach $107.73 by 2021. The most significant year-over-year growth appears between 2020 and 2021, with an increase of approximately 22.9% ($87.65 to $107.73).
- Sales Per Share Trends
- Sales per share also showed a general increase over the five-year period, rising from $5.45 in 2017 to $8.40 in 2021. The growth was relatively modest between 2019 and 2020, from $6.93 to $7.02, but stronger growth is observed from 2020 to 2021 with a rise to $8.40, indicating improved revenue generation per share.
- Price-to-Sales Ratio (P/S) Analysis
- The Price-to-Sales ratio demonstrated a steady upward trend, increasing from 8.18 in 2017 to 12.83 in 2021. This indicates that the market valuation relative to sales has been expanding, suggesting increased investor confidence or expectations for future growth. The P/S ratio growth was consistent each year, with the most marked increases occurring between 2017 and 2019.
- Overall Financial Insights
- The consistent increase in share price along with rising sales per share reflects positive market performance and improving operational results. The expanding P/S ratio suggests that investors are willing to pay more for each dollar of sales than in prior years, which may reflect anticipated growth prospects or improved market positioning. The alignment of these three indicators points towards robust growth dynamics and favorable investor sentiment during the period analyzed.
Price to Book Value (P/BV)
Edwards Lifesciences Corp., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 623,207,437 | 624,518,873 | 627,367,734 | 623,298,987 | 630,071,124 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in thousands) | 5,835,900) | 4,574,300) | 4,148,300) | 3,140,400) | 2,956,200) | |
| Book value per share (BVPS)2 | 9.36 | 7.32 | 6.61 | 5.04 | 4.69 | |
| Share price1, 3 | 107.73 | 87.65 | 76.85 | 59.26 | 44.61 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 11.50 | 11.97 | 11.62 | 11.76 | 9.51 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Abbott Laboratories | 5.75 | 6.65 | — | — | — | |
| CVS Health Corp. | 1.83 | 1.33 | — | — | — | |
| Elevance Health Inc. | 3.07 | 2.19 | — | — | — | |
| Intuitive Surgical Inc. | 8.59 | 9.53 | — | — | — | |
| Medtronic PLC | 3.26 | 2.48 | — | — | — | |
| UnitedHealth Group Inc. | 6.27 | 4.83 | — | — | — | |
| P/BV Ratio, Sector | ||||||
| Health Care Equipment & Services | 4.16 | 3.51 | — | — | — | |
| P/BV Ratio, Industry | ||||||
| Health Care | 5.07 | 4.90 | — | — | — | |
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 = Stockholders’ equity ÷ No. shares of common stock outstanding
= 5,835,900,000 ÷ 623,207,437 = 9.36
3 Closing price as at the filing date of Edwards Lifesciences Corp. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 107.73 ÷ 9.36 = 11.50
5 Click competitor name to see calculations.
- Share Price Trend
- The share price demonstrated a consistent upward trajectory over the five-year period. Starting at $44.61 at the end of 2017, it rose steadily each year to reach $107.73 by the end of 2021. This represents a cumulative increase of approximately 141.4%, indicating strong market performance and increasing investor confidence.
- Book Value Per Share (BVPS) Trend
- The book value per share showed a positive growth trend as well, increasing from $4.69 in 2017 to $9.36 in 2021. The growth in BVPS was relatively steady, with notable increments in 2019 and 2021. This upward trend suggests an improvement in the company's net asset value on a per-share basis, reflecting enhanced financial strength or retained earnings accumulation over the period.
- Price-to-Book Value Ratio (P/BV) Analysis
- The P/BV ratio fluctuated moderately around a high level throughout the period. It started at 9.51 in 2017, peaked at 11.97 in 2020, and then slightly declined to 11.5 in 2021. Despite these fluctuations, the P/BV remained consistently above 9, indicating that the market valued the shares at a significant premium over their book value. This persistent premium could be interpreted as investor optimism about the company's growth prospects or intangible assets not fully captured on the balance sheet.
- Overall Insights
- Overall, the data indicates solid growth in both market valuation and underlying book value. The steady increase in share price aligned with rising BVPS signifies concurrent improvements in both market perception and fundamental value. However, the consistently high P/BV ratio suggests that investors may be pricing in expectations of future growth or competitive advantages that are not solely reflected by book value. The slight dip in P/BV in the most recent year could reflect a marginal adjustment in market sentiment or a relatively faster growth in book value compared to share price.