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AutoZone Inc (NYSE:AZO)
E10
$22.99 (As of Apr. 2016)

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.

AutoZone Inc's adjusted earnings per share data for the three months ended in Apr. 2016 was $10.770. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $22.99 for the trailing ten years ended in Apr. 2016.

As of today, AutoZone Inc's current stock price is $793.84. AutoZone Inc's E10 for the quarter that ended in Apr. 2016 was $22.99. AutoZone Inc's Shiller P/E Ratio of today is 34.53.

During the past 13 years, the highest Shiller P/E Ratio of AutoZone Inc was 37.64. The lowest was 15.12. And the median was 29.28.


Definition

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. When we calculate the today’'s Shiller P/E ratio of a stock, we use today’s price divided by E10.

What is E10? How do we calculate E10?

E10 is the average of the inflation adjusted earnings of a company over the past 10 years. Let’s use an example to explain.

If we want to calculate the E10 of Wal-Mart (WMT) for Dec. 31, 2010, we need to have the inflation data and the earnings from 2001 through 2010.

We adjusted the earnings of 2001 earnings data with the total inflation from 2001 through 2010 to the equivalent earnings in 2010. If the total inflation from 2001 to 2010 is 40%, and Wal-Mart earned $1 a share in 2001, then the 2001’s equivalent earnings in 2010 is $1.4 a share. If Wal-Mart earns $1 again in 2002, and the total inflation from 2002 through 2010 is 35%, then the equivalent 2002 earnings in 2010 is $1.35. So on and so forth, you get the equivalent earnings of past 10 years. Then you add them together and divided the sum by 10 to get E10.

For example, AutoZone Inc's adjusted earnings per share data for the three months ended in Apr. 2016 was:

Adj_EPS=Earnigns per Share/CPI of Apr. 2016 (Change)*Current CPI (Apr. 2016)
=10.77/239.261*239.261
=10.770

Current CPI (Apr. 2016) = 239.261.

AutoZone Inc Quarterly Data

201408201411201502201504201505201508201511201602201604201605
per share eps 11.2307.2706.5109.5709.57012.7008.2907.43010.77010.770
CPI 237.852236.151234.722236.599237.805238.316237.336237.111239.261239.826
Adj_EPS 11.2977.3666.6369.6789.62912.7508.3577.49710.77010.745
201202201205201208201211201302201305201308201311201402201405
per share eps 4.1506.2808.4005.4104.7807.27010.3506.2905.6308.460
CPI 227.663229.815230.379230.221232.166232.945233.877233.069234.781237.900
Adj_EPS 4.3616.5388.7245.6224.9267.46710.5886.4575.7378.508
200908200911201002201005201008201011201102201105201108201111
per share eps 4.3702.8202.4604.1205.6003.7703.3405.2907.1204.680
CPI 215.834216.330216.741218.178218.312218.803221.309225.964226.545226.230
Adj_EPS 4.8443.1192.7164.5186.1374.1223.6115.6017.5204.950
200702200705200708200711200802200805200808200811200902200905
per share eps 1.4502.1703.2002.0201.6702.4903.8502.2302.0303.130
CPI 203.499207.949207.917210.177211.693216.632219.086212.425212.193213.856
Adj_EPS 1.7052.4973.6822.3001.8872.7504.2052.5122.2893.502

Add all the adjusted EPS together and divide 10 will get our e10.


Explanation

If a company grows much fast than inflation, E10 may underestimate the company's earnings power. Shiller P/E Ratio can seem to be too high even the actual P/E is low.

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.

AutoZone Inc's Shiller P/E Ratio of today is calculated as

Shiller P/E Ratio=Share Price/E10
=793.84/22.99
=34.53

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

During the past 13 years, the highest Shiller P/E Ratio of AutoZone Inc was 37.64. The lowest was 15.12. And the median was 29.28.


Be Aware

Shiller P/E Ratio works better for cyclical companies. It gives you a better idea on the company's real earnings power.


Related Terms

Shiller P/E Ratio


Historical Data

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

AutoZone Inc Annual Data

Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15
e10 0.005.056.097.018.3310.4212.4614.6917.3320.84

AutoZone Inc Quarterly Data

Aug14Nov14Feb15Apr15May15Aug15Nov15Feb16Apr16May16
e10 17.3317.7018.2119.1219.7520.8421.5222.2622.990.00
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