Medtronic PLC (NYSE:MDT)

Price to Earnings Ratio (P/E)

Over the observed time frame, the Price to Earnings ratio exhibits a notable variability. Initially, it increased sharply from 32.34 to a peak of 55.13, reflecting potentially increased investor expectations or growth optimism. This was followed by a general declining trend, reaching a low of 22.61, suggesting a correction or moderation in earnings expectations. In the recent periods, the ratio shows moderate fluctuation within the mid-20s range, indicating a period of relative stabilization but with some volatility.

Price to Operating Profit Ratio (P/OP)

The Price to Operating Profit ratio follows a pattern somewhat similar to the P/E ratio but with overall lower values. It peaked early at 49.88 but then declined more steadily, dropping below 20 in several quarters, with the lowest around 17.99. Thereafter, it demonstrates relative stability with values oscillating approximately between 18 and 22, implying consistent valuation levels relative to operating profitability in the more recent periods.

Price to Sales Ratio (P/S)

The Price to Sales ratio shows a gradual downward trend throughout the period. Beginning at just above 5, indicative of relatively high market valuation relative to sales, it declines steadily to a range around 3.3 to 3.7 in the later periods. This reduction suggests a market reassessment of sales valuation multiples or possibly improved sales figures relative to market price.

Price to Book Value Ratio (P/BV)

The Price to Book Value ratio demonstrates a somewhat cyclical pattern but with an overall flattening trend after an initial increase from 2.84 to above 3.5. Subsequently, it decreases to levels around 2.0 to 2.4 with moderate fluctuations, indicating a stabilizing valuation relative to the company's book value. This may reflect periodic market adjustments in perceived asset value or equity performance.

Share Price Trends

The share price experienced an overall fluctuation from July 2020 to July 2025. An initial upward trend was noted, peaking at 134.73 US$ in July 2021, followed by a significant decline reaching a low around 79.25 US$ in October 2022. After this trough, the share price showed moderate variability without a strong directional trend, ending at 92.18 US$ in July 2025. This indicates periods of volatility and market adjustment after mid-2021.

Earnings per Share (EPS) Patterns

EPS displayed a relatively stable and slightly increasing trend despite some short-term fluctuations. After a decrease from 3.28 US$ in July 2020 to a low of 2.15 US$ in January 2021, EPS gradually increased to peak values around 3.92 US$ in July 2022. Subsequently, EPS fluctuated moderately, mostly staying within the range of approximately 2.7 US$ to 3.6 US$, closing at 3.63 US$ in July 2025. This generally reflects a stable earnings capacity over the observed period.

Price-to-Earnings (P/E) Ratio Insights

The P/E ratio exhibited notable variability, starting from 32.34 in July 2020 and increasing sharply to a peak of 55.13 in January 2021. This peak corresponds to a period of declining EPS and rising share price, suggesting elevated market expectations. Following this, the P/E ratio steadily decreased, reaching a trough near 22.61 in July 2022, aligning with share price weakness and EPS strength. The ratio then fluctuated moderately between approximately 23 and 31, indicating market valuation adjustments that reflect changing investor sentiment relative to earnings performance.

Overall Observations

The data reveal a market that responded dynamically to earnings changes and external factors affecting valuation. The peak share price and elevated P/E ratio in mid-2021, followed by a substantial price decline with relatively resilient EPS, suggest external pressures impacting market perception. The company’s earnings showed resilience and a mild growth trajectory despite volatile share prices, indicating underlying operational stability. The P/E ratio movements signify periods of investor over- and under-valuation relative to earnings fundamentals over the five-year span.

Share Price Trend

The share price demonstrated an initial upward trajectory, rising from $106.15 to a peak of $134.73 between mid-2020 and mid-2021. Subsequently, there was a notable decline, reaching a trough around $79.25 in late 2022. Following this low point, the price experienced moderate fluctuations but generally maintained a level below the previous peak, oscillating between approximately $79 and $92 up to mid-2025.

Operating Profit per Share Trend

Operating profit per share showed an overall positive trend across the period analyzed. Beginning at $2.96 in mid-2020, it experienced fluctuations early on but demonstrated consistent growth from late 2021 onward, increasing from $3.94 to $4.77 by mid-2025. The data suggests steady improvements in operational profitability over time.

Price to Operating Profit (P/OP) Ratio Analysis

The P/OP ratio experienced significant variation. Initially, it was high at 35.86 in mid-2020 and reached a maximum of nearly 50 in early 2021, indicative of relatively high share prices compared to operating profits. Thereafter, the ratio steadily declined, reaching a low around 17.99 in late 2022, driven largely by both the drop in share price and the increase in operating profits per share. Post-2022, the ratio stabilized in the range of approximately 18 to 22, reflecting a more balanced valuation relative to operating profit.

Insights

The inverse relationship between the share price and operating profit per share is notable in the latter half of the period, resulting in a declining P/OP ratio, which may suggest a market correction or increased investor caution relative to the company’s operational earnings. The stabilization of the P/OP ratio in the recent quarters may indicate a new valuation equilibrium. Overall, operational profitability improved steadily, whereas market valuation experienced volatility, culminating in more measured investor sentiment.

The financial data reveals varied trends in the share price, sales per share, and price-to-sales ratio (P/S) over the reported periods.

Share Price

The share price displayed a generally upward trend from mid-2020 through mid-2021, increasing from $106.15 to a peak of $134.73. Following this peak, a notable decline occurred, with prices falling consistently to $79.25 by late 2022. From that point onward, the share price exhibited fluctuations without a clear directional trend, oscillating between approximately $79 and $92 through mid-2025. This pattern indicates high volatility and a period of decreased investor confidence post-peak, with some recovery attempts that did not sustain a strong upward momentum.

Sales Per Share

Sales per share showed a steady and gradual increase throughout the entire period, rising from $20.78 in mid-2020 to $26.66 by mid-2025. This consistent growth suggests an improvement in underlying revenue generation per share despite the volatility observed in the share price. The steady increase also implies operational stability and growth in sales performance over the reported quarters.

Price-to-Sales Ratio (P/S)

The P/S ratio initially trended upwards from 5.11 to 5.74 in early 2021, reflecting an increasing market valuation relative to sales. However, this ratio then declined sharply to a low of around 3.18 by early 2024, mirroring the drop in share price. Post this trough, the ratio exhibited minor fluctuations, stabilizing in the range of approximately 3.3 to 3.5 through mid-2025. This trajectory indicates a market revaluation, with investors assigning a lower valuation multiple to sales as the volatility in share price and external factors influenced market sentiment.

In summary, the company’s sales per share demonstrated a consistent positive trend, indicating growth in sales efficiency. Conversely, the share price experienced significant volatility, including a strong rise followed by a considerable decline and subsequent fluctuations. The P/S ratio trend aligns with these dynamics, suggesting a re-rating of the stock by the market, with the multiple contracting after the initial peak and then stabilizing at lower levels. These dynamics collectively suggest underlying business growth with market valuation subject to variable investor sentiment over time.

The analysis of the financial ratios over the observed periods reveals discernible trends in the company's market valuation relative to its book value, as well as fluctuations in both share price and book value per share (BVPS).

Share Price

The share price exhibited an initial uptrend, rising from $106.15 in late July 2020 to a peak of $134.73 by late July 2021. Subsequently, a notable decline occurred, with prices falling to a low near $79.25 by late October 2022. From this low, a modest recovery is observed, with the price gradually increasing to approximately $92.18 by late July 2025. Overall, the share price shows volatility with a significant intermediate trough followed by a slow upward correction.

Book Value per Share (BVPS)

BVPS remained relatively stable throughout the entire period, fluctuating modestly around the high 30s range, starting at $37.42 and ending at about $37.34. The values indicate minimal growth or decline, suggesting that the company's net asset value per share has been largely consistent without major expansion or erosion.

Price-to-Book Value Ratio (P/BV)

The P/BV ratio trended downward over the timeframe analyzed. Initially, it was relatively high, peaking at 3.52 in late July 2021, which correlated with the peak in share price. A sharp decline followed, bottoming around 2.03 by late October 2022, aligning with the trough in share price and stable BVPS. Thereafter, a gradual increase and cyclic fluctuations occurred, with the ratio ending at around 2.47 by late July 2025. This decline from peak suggests a re-rating by the market, where shares traded closer to their book value compared to earlier periods, reflecting moderated investor expectations or market conditions.

In summary, while the book value per share remained steady, share price movements caused significant variation in the price-to-book ratio. The data indicate an initial phase of optimistic market valuation followed by a correction and partial recovery. The stability in BVPS alongside fluctuating market prices implies that changes in valuation were driven mainly by external market sentiment or investor perceptions rather than fundamental changes in the company’s net asset base.