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Varian Medical Systems Inc (NYSE:VAR)
Shiller P/E Ratio
21.39 (As of Today)

As of today, Varian Medical Systems Inc's current share price is $80.65. Varian Medical Systems Inc's E10 for the quarter that ended in Jun. 2015 was $3.77. Varian Medical Systems Inc's Shiller P/E Ratio for today is 21.39.

VAR' s 10-Year Shiller P/E Ratio Range
Min: 15.58   Max: 67.07
Current: 21.38

15.58
67.07

During the past 13 years, Varian Medical Systems Inc's highest Shiller P/E Ratio was 67.07. The lowest was 15.58. And the median was 25.48.

VAR's Shiller P/E Ratiois ranked higher than
71% of the 96 Companies
in the Global Medical Devices industry.

( Industry Median: 32.28 vs. VAR: 21.38 )

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.

Varian Medical Systems Inc's adjusted earnings per share data for the three months ended in Jun. 2015 was $1.130. 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 $3.77 for the trailing six years ended in Jun. 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.

Varian Medical Systems Inc's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=80.65/3.77
=21.39

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

Varian Medical Systems Inc's E10 for the fiscal year that ended in Sep14 is calculated as:

For example, Varian Medical Systems Inc's adjusted earnings per share data for the three months ended in Jun. 2015 was:

Adj_EPS=Earnigns per Share/CPI of Jun. 2015*CPI of Current
=1.13/238.638*238.666
=1.130

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

Current CPI = 238.666.

Varian Medical Systems Inc Quarterly Data

201303201306201309201312201403201406201409201412201503201506
per share eps 1.0201.0301.0790.9100.8801.0201.0240.9201.0501.130
CPI 232.773233.504234.149233.049236.293238.343238.031234.812236.119238.638
Adj_EPS 1.0461.0531.1000.9320.8891.0211.0270.9351.0611.130
201009201012201103201106201109201112201203201206201209201212
per share eps 0.8570.8000.8600.8300.8730.7900.9400.9601.0730.860
CPI 218.439219.179223.467225.722226.889225.672229.392229.478231.407229.601
Adj_EPS 0.9360.8710.9180.8780.9180.8350.9780.9981.1070.894
200909200912201003201006
per share eps 0.7750.6300.7300.690
CPI 215.969215.949217.631217.965
Adj_EPS 0.8560.6960.8010.756

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.

Varian Medical Systems Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
ShillerPE 44.4447.3029.5433.2521.7827.1720.1420.6222.8022.36

Varian Medical Systems Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
ShillerPE 23.3521.0022.8023.2024.5223.5922.3624.2725.6122.35
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