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Check Point Software Technologies Ltd (NAS:CHKP)
Shiller P/E Ratio
31.95 (As of Today)

As of today, Check Point Software Technologies Ltd's current share price is $87.53. Check Point Software Technologies Ltd's E10 for the quarter that ended in Dec. 2014 was $2.74. Check Point Software Technologies Ltd's Shiller P/E Ratio for today is 31.95.

CHKP' s 10-Year Shiller P/E Ratio Range
Min: 13.78   Max: 35.4
Current: 31.9

13.78
35.4

During the past 13 years, Check Point Software Technologies Ltd's highest Shiller P/E Ratio was 35.40. The lowest was 13.78. And the median was 22.51.

CHKP's Shiller P/E Ratiois ranked higher than
89% of the 2946 Companies
in the Global Software - Application industry.

( Industry Median: 0.00 vs. CHKP: 31.90 )

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.

Check Point Software Technologies Ltd's adjusted earnings per share data for the three months ended in Dec. 2014 was $0.988. Since most companies do not have as long as 10 years history, here we use 6 years to calculate. Add all the adjusted EPS for the past 6 years together and divide 6 will get our E10, which is $2.74 for the trailing six years ended in Dec. 2014.


Definition

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.

The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.

Check Point Software Technologies Ltd's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=87.53/2.74
=31.95

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Check Point Software Technologies Ltd's E10 for the fiscal year that ended in Dec14 is calculated as:

For example, Check Point Software Technologies Ltd's adjusted earnings per share data for the three months ended in Dec. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Dec. 2014*CPI of Current
=0.98/234.812*236.818
=0.988

Since most companies do not have as long as 10 years history, GuruFocus uses 6 years to do the calculation.

Current CPI = 236.818.

Check Point Software Technologies Ltd Quarterly Data

201212201303201306201309201312201403201406201409201412201503
per share eps 0.8500.7300.7600.8000.9900.7800.8300.8400.9800.860
CPI 229.601232.773233.504234.149233.049236.293238.343238.031234.812236.119
Adj_EPS 0.8770.7430.7710.8091.0060.7820.8250.8360.9880.863
201006201009201012201103201106201109201112201203201206201209
per share eps 0.4800.5400.6310.5700.6000.6300.7530.6800.7100.730
CPI 217.965218.439219.179223.467225.722226.889225.672229.392229.478231.407
Adj_EPS 0.5220.5850.6820.6040.6290.6580.7900.7020.7330.747
200906200909200912201003
per share eps 0.3600.4300.5130.460
CPI 215.693215.969215.949217.631
Adj_EPS 0.3950.4720.5630.501

Add all the adjusted EPS together and divide 6 will get our E10.


Explanation

Compared with the regular P/E ratio, which works poorly for cyclical businesses, the Shiller P/E smoothed out the fluctuations of profit margins during business cycles. Therefore it is more accurate in reflecting the valuation of the company.

If a company has consistent business performance, the Shiller P/E should give similar results to regular P/E.

Compared with the P/S ratio, the Shiller P/E makes the comparison between different industries more meaningful.


Be Aware

The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a company’s business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.


Related Terms

P/E Ratio, P/B Ratio, P/S Ratio, Price-to-Free-Cash-Flow ratio, E10


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Check Point Software Technologies Ltd Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
ShillerPE 17.6218.2618.6015.2824.7329.5629.3622.7326.5828.63

Check Point Software Technologies Ltd Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
ShillerPE 22.7321.3821.7123.9926.5826.6425.4125.5528.630.00
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