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Microsoft Corp (NAS:MSFT)
Shiller P/E Ratio
23.20 (As of Today)

As of today, Microsoft Corp's current share price is $49.41. Microsoft Corp's E10 for the quarter that ended in Dec. 2015 was $2.13. Microsoft Corp's Shiller P/E Ratio for today is 23.20.

MSFT' s Shiller P/E Ratio Range Over the Past 10 Years
Min: 13.06   Max: 37.43
Current: 23.16

13.06
37.43

During the past 13 years, Microsoft Corp's highest Shiller P/E Ratio was 37.43. The lowest was 13.06. And the median was 19.89.

MSFT's Shiller P/E Ratio is ranked higher than
69% of the 406 Companies
in the Global Software - Infrastructure industry.

( Industry Median: 33.94 vs. MSFT: 23.16 )

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.

Microsoft Corp's adjusted earnings per share data for the three months ended in Dec. 2015 was $0.620. Add all the adjusted EPS for the past 10 years together and divide 10 will get our E10, which is $2.13 for the trailing ten years ended in Dec. 2015.


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.

Microsoft Corp's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=49.41/2.13
=23.20

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

Microsoft Corp's E10 for the fiscal year that ended in Jun15 is calculated as:

For example, Microsoft Corp's adjusted earnings per share data for the three months ended in Dec. 2015 was:

Adj_EPS=Earnigns per Share/CPI of Dec. 2015 (Change)*Current CPI (Dec. 2015)
=0.62/236.525*236.525
=0.620

Current CPI (Dec. 2015) = 236.525.

Microsoft Corp Quarterly Data

201309201312201403201406201409201412201503201506201509201512
per share eps 0.6200.7800.6800.5510.5400.7100.610-0.3960.5700.620
CPI 234.149233.049236.293238.343238.031234.812236.119238.638237.945236.525
Adj_EPS 0.6260.7920.6810.5470.5370.7150.611-0.3920.5670.620
201103201106201109201112201203201206201209201212201303201306
per share eps 0.6100.6870.6800.7800.600-0.0590.5300.7600.7200.587
CPI 223.467225.722226.889225.672229.392229.478231.407229.601232.773233.504
Adj_EPS 0.6460.7200.7090.8180.619-0.0610.5420.7830.7320.595
200809200812200903200906200909200912201003201006201009201012
per share eps 0.4800.4700.3300.3400.4000.7400.4500.5110.6200.770
CPI 218.783210.228212.709215.693215.969215.949217.631217.965218.439219.179
Adj_EPS 0.5190.5290.3670.3730.4380.8110.4890.5550.6710.831
200603200606200609200612200703200706200709200712200803200806
per share eps 0.2900.2760.3500.2600.5000.3140.4500.5000.4700.457
CPI 199.800202.900202.900201.800205.352208.352208.490210.036213.528218.815
Adj_EPS 0.3430.3220.4080.3050.5760.3560.5110.5630.5210.494

Add all the adjusted EPS together and divide 10 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.

Microsoft Corp Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
ShillerPE 27.1730.8424.2219.8817.5916.9518.1418.2619.8420.92

Microsoft Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
ShillerPE 17.3018.8519.9319.8421.8021.7318.7420.9220.7526.02
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