Switch to:
GuruFocus has detected 3 Warning Signs with Red Hat Inc $RHT.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Red Hat Inc (NYSE:RHT)
Shiller PE Ratio
108.27 (As of Today)

As of today, Red Hat Inc's current share price is $87.70. Red Hat Inc's E10 for the quarter that ended in Feb. 2017 was $0.81. Red Hat Inc's Shiller P/E Ratio for today is 108.27.

RHT' s Shiller PE Ratio Range Over the Past 10 Years
Min: 81.57   Max: 2863
Current: 108.86

81.57
2863

During the past 13 years, Red Hat Inc's highest Shiller P/E Ratio was 2863.00. The lowest was 81.57. And the median was 117.68.

RHT's Shiller PE Ratio is ranked lower than
88% of the 291 Companies
in the Global Software - Application industry.

( Industry Median: 38.24 vs. RHT: 108.86 )

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.

Red Hat Inc's adjusted earnings per share data for the three months ended in Feb. 2017 was $0.360. Add all the adjusted EPS for the past 10 years together and divide 10 will get our E10, which is $0.81 for the trailing ten years ended in Feb. 2017.


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.

Red Hat Inc's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=87.70/0.81
=108.27

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Red Hat Inc's E10 for the fiscal year that ended in Feb17 is calculated as:

For example, Red Hat Inc's adjusted earnings per share data for the three months ended in Feb. 2017 was:

Adj_EPS=Earnigns per Share/CPI of Feb. 2017 (Change)*Current CPI (Feb. 2017)
=0.36/243.603*243.603
=0.360

Current CPI (Feb. 2017) = 243.603.

Red Hat Inc Quarterly Data

201411201502201505201508201511201602201605201608201611201702
per share eps 0.2600.2500.2600.2800.2500.2900.3300.3200.3700.360
CPI 236.151234.722237.805238.316237.336237.111240.229240.849241.353243.603
Adj_EPS 0.2680.2590.2660.2860.2570.2980.3350.3240.3730.360
201205201208201211201302201305201308201311201402201405201408
per share eps 0.1900.1800.1800.2200.2100.2100.2700.2400.2000.250
CPI 229.815230.379230.221232.166232.945233.877233.069234.781237.900237.852
Adj_EPS 0.2010.1900.1900.2310.2200.2190.2820.2490.2050.256
200911201002201005201008201011201102201105201108201111201202
per share eps 0.0800.1200.1200.1200.1300.1700.1700.2000.1900.190
CPI 216.330216.741218.178218.312218.803221.309225.964226.545226.230227.663
Adj_EPS 0.0900.1350.1340.1340.1450.1870.1830.2150.2050.203
200705200708200711200802200805200808200811200902200905200908
per share eps 0.0800.0900.1000.1000.0800.1000.1200.0800.1000.150
CPI 207.949207.917210.177211.693216.632219.086212.425212.193213.856215.834
Adj_EPS 0.0940.1050.1160.1150.0900.1110.1380.0920.1140.169

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 local exchange's currency.

Red Hat Inc Annual Data

Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16Feb17
ShillerPE 0.000.00429.19210.75125.81109.67106.80111.8395.93102.78

Red Hat Inc Quarterly Data

Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16Feb17
ShillerPE 102.52111.83120.45108.61121.7095.93108.7097.87101.20102.78
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK