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As of today, Google Inc's current share price is $587.37. Google Inc's E10 for the quarter that ended in Jun. 2014 was $15.01. Google Inc's Shiller P/E Ratio for today is 39.80.
During the past 13 years, Google Inc's highest Shiller P/E Ratio was 59.22. The lowest was 26.36. And the median was 36.92.
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.
Google Inc's adjusted earnings per share data for the three months ended in Jun. 2014 was $4.984. 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 $15.01 for the trailing six years ended in Jun. 2014.
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.
Google Inc's Shiller P/E Ratio for today is calculated as
|Shiller P/E Ratio||=||Share Price||/||E10|
Google Inc's E10 for the fiscal year that ended in Dec13 is calculated as:
For example, Google Inc's adjusted earnings per share data for the three months ended in Jun. 2014 was:
|Adj_EPS||=||Earnigns per Share||/||CPI of Jun. 2014||*||CPI of Current|
Since most companies do not have as long as 10 years history, here we use 6 years to calculate:
Current CPI = 238.064.
Google Inc Quarterly Data
|per share eps||4.379||4.214||3.268||4.312||4.975||4.770||4.379||4.955||5.045||4.990|
|per share eps||2.567||3.067||3.033||2.858||3.363||3.910||2.758||3.844||4.169||3.958|
|per share eps||2.032||0.309||2.247||2.332|
Add all the adjusted EPS together and divide 6 will get our E10.
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.
The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a companys business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.
Google Inc Annual Data
Google Inc Quarterly Data