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As of today, Red Hat Inc's current share price is $79.08. Red Hat Inc's E10 for the quarter that ended in May. 2015 was $0.79. Red Hat Inc's Shiller P/E Ratio for today is 100.10.
During the past 13 years, Red Hat Inc's highest Shiller P/E Ratio was 2424.00. The lowest was 29.52. And the median was 87.87.
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 May. 2015 was $0.261. 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 $0.79 for the trailing six years ended in May. 2015.
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|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
Red Hat Inc's E10 for the fiscal year that ended in Feb15 is calculated as:
For example, Red Hat Inc's adjusted earnings per share data for the three months ended in May. 2015 was:
|Adj_EPS||=||Earnigns per Share||/||CPI of May. 2015||*||CPI of Current|
Since most companies do not have as long as 10 years history, GuruFocus uses 6 years to do the calculation.
Current CPI = 238.709.
Red Hat Inc Quarterly Data
|per share eps||0.220||0.210||0.210||0.270||0.235||0.200||0.250||0.260||0.255||0.260|
|per share eps||0.120||0.130||0.169||0.170||0.200||0.190||0.183||0.190||0.180||0.180|
|per share eps||0.150||0.080||0.121||0.120|
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.
Red Hat Inc Annual Data
Red Hat Inc Quarterly Data