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As of today, Zale Corp's current share price is $21.13. Zale Corp's E10 for the quarter that ended in Jan. 2014 was $-2.44. Zale Corp's Shiller P/E Ratio for today is 0.00.
During the past 13 years, Zale Corp's highest Shiller P/E Ratio was 28.64. The lowest was 1.15. And the median was 18.93.
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.
Zale Corp's adjusted earnings per share data for the three months ended in Jan. 2014 was $1.145. 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 $-2.44 for the trailing six years ended in Jan. 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.
Zale Corp's Shiller P/E Ratio for today is calculated as
|Shiller P/E Ratio||=||Share Price||/||E10|
Zale Corp's E10 for the fiscal year that ended in Jul13 is calculated as:
For example, Zale Corp's adjusted earnings per share data for the three months ended in Jan. 2014 was:
|Adj_EPS||=||Earnigns per Share||/||CPI of Jan. 2014||*||CPI of Current|
Since most companies do not have as long as 10 years history, here we use 6 years to calculate:
Current CPI = 237.056.
Zale Corp Quarterly Data
|per share eps||-0.990||0.770||-0.140||-0.613||-0.880||1.020||0.130||-0.246||-0.830||1.130|
|per share eps||-0.610||-2.810||-1.870||0.210||-0.380||-0.888||-3.050||0.730||-0.280||-1.015|
|per share eps||-0.400||-0.146||-1.430||-1.000|
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.
Zale Corp Annual Data
Zale Corp Quarterly Data