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Hewlett-Packard Co (NYSE:HPQ)
Shiller P/E Ratio
25.50 (As of Today)

As of today, Hewlett-Packard Co's current share price is $40.54. Hewlett-Packard Co's E10 for the quarter that ended in Oct. 2014 was $1.59. Hewlett-Packard Co's Shiller P/E Ratio for today is 25.50.

HPQ' s 10-Year Shiller P/E Ratio Range
Min: 6.06   Max: 47.34
Current: 25.43

6.06
47.34

During the past 13 years, Hewlett-Packard Co's highest Shiller P/E Ratio was 47.34. The lowest was 6.06. And the median was 20.19.

HPQ's Shiller P/E Ratiois ranked higher than
87% of the 2788 Companies
in the Global Computer Systems industry.

( Industry Median: 9999.00 vs. HPQ: 25.43 )

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.

Hewlett-Packard Co's adjusted earnings per share data for the three months ended in Oct. 2014 was $0.691. 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 $1.59 for the trailing six years ended in Oct. 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.

Hewlett-Packard Co's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=40.54/1.59
=25.50

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

Hewlett-Packard Co's E10 for the fiscal year that ended in Oct14 is calculated as:

For example, Hewlett-Packard Co's adjusted earnings per share data for the three months ended in Oct. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Oct. 2014*CPI of Current
=0.697/237.433*235.51
=0.691

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

Current CPI = 235.51.

Hewlett-Packard Co Quarterly Data

201207201210201301201304201307201310201401201404201407201410
per share eps -4.490-3.4880.6300.5500.7100.7270.7400.6600.5200.697
CPI 229.104231.317230.280232.531233.596233.546233.916237.072238.250237.433
Adj_EPS -4.616-3.5510.6440.5570.7160.7330.7450.6560.5140.691
201001201004201007201010201101201104201107201110201201201204
per share eps 0.9300.9100.7501.1061.1701.0500.9300.1180.7300.800
CPI 216.687218.009218.011218.711220.223224.906225.922226.421226.665230.085
Adj_EPS 1.0110.9830.8101.1911.2511.1000.9690.1230.7580.819
200901200904200907200910
per share eps 0.7500.7100.6900.996
CPI 211.143213.240215.351216.177
Adj_EPS 0.8370.7840.7551.085

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.

Hewlett-Packard Co Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
ShillerPE 32.8944.4639.4519.8220.6815.498.297.7914.0822.16

Hewlett-Packard Co Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
ShillerPE 7.447.799.2811.6714.5914.0817.0019.4221.8622.16
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