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As of today, VMWare Inc's current share price is $77.10. VMWare Inc's E10 for the quarter that ended in Dec. 2014 was $1.56. VMWare Inc's Shiller P/E Ratio for today is 49.42.
During the past 11 years, VMWare Inc's highest Shiller P/E Ratio was 164.92. The lowest was 48.84. And the median was 75.42.
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.
VMWare Inc's adjusted earnings per share data for the three months ended in Dec. 2014 was $0.749. 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 $1.56 for the trailing six years ended in Dec. 2014.
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.
VMWare Inc's Shiller P/E Ratio for today is calculated as
|Shiller P/E Ratio||=||Share Price||/||E10|
VMWare Inc's E10 for the fiscal year that ended in Dec14 is calculated as:
For example, VMWare Inc's adjusted earnings per share data for the three months ended in Dec. 2014 was:
|Adj_EPS||=||Earnigns per Share||/||CPI of Dec. 2014||*||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 = 235.189.
VMWare Inc Quarterly Data
|per share eps||0.360||0.475||0.400||0.570||0.600||0.770||0.460||0.380||0.450||0.750|
|per share eps||0.190||0.180||0.200||0.280||0.290||0.510||0.410||0.465||0.440||0.440|
|per share eps||0.180||0.080||0.090||0.139|
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.
VMWare Inc Annual Data
VMWare Inc Quarterly Data