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Sonic Corp (NAS:SONC)
E10
\$0.85 (As of Nov. 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.

Sonic Corp's adjusted earnings per share data for the three months ended in Nov. 2016 was \$0.280. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is \$0.85 for the trailing ten years ended in Nov. 2016.

As of today, Sonic Corp's current stock price is \$25.40. Sonic Corp's E10 for the quarter that ended in Nov. 2016 was \$0.85. Sonic Corp's Shiller P/E Ratio of today is 29.88.

During the past 13 years, the highest Shiller P/E Ratio of Sonic Corp was 44.40. The lowest was 8.82. And the median was 21.05.

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, Sonic Corp's adjusted earnings per share data for the three months ended in Nov. 2016 was:

 Adj_EPS = Earnigns per Share / CPI of Nov. 2016 (Change) * Current CPI (Nov. 2016) = 0.28 / 241.353 * 241.353 = 0.280

Current CPI (Nov. 2016) = 241.353.

Sonic Corp Quarterly Data

 201408 201411 201502 201505 201508 201511 201602 201605 201608 201611 per share eps 0.34 0.18 0.14 0.38 0.5 0.24 0.22 0.31 0.52 0.28 CPI 237.852 236.151 234.722 237.805 238.316 237.336 237.111 240.229 240.849 241.353 Adj_EPS 0.345 0.184 0.144 0.386 0.506 0.244 0.224 0.311 0.521 0.28 201202 201205 201208 201211 201302 201305 201308 201311 201402 201405 per share eps 0.03 0.24 0.24 0.11 0.06 0.26 0.21 0.14 0.07 0.3 CPI 227.663 229.815 230.379 230.221 232.166 232.945 233.877 233.069 234.781 237.9 Adj_EPS 0.032 0.252 0.251 0.115 0.062 0.269 0.217 0.145 0.072 0.304 200908 200911 201002 201005 201008 201011 201102 201105 201108 201111 per share eps 0.27 0.1 -0.01 0.18 0.07 0.12 0.07 -0.08 0.2 0.09 CPI 215.834 216.33 216.741 218.178 218.312 218.803 221.309 225.964 226.545 226.23 Adj_EPS 0.302 0.112 -0.011 0.199 0.077 0.132 0.076 -0.085 0.213 0.096 200702 200705 200708 200711 200802 200805 200808 200811 200902 200905 per share eps 0.09 0.31 0.33 0.22 0.15 0.28 0.33 0.12 0.14 0.27 CPI 203.499 207.949 207.917 210.177 211.693 216.632 219.086 212.425 212.193 213.856 Adj_EPS 0.107 0.36 0.383 0.253 0.171 0.312 0.364 0.136 0.159 0.305

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.

Sonic Corp's Shiller P/E Ratio of today is calculated as

 Shiller P/E Ratio = Share Price / E10 = 25.40 / 0.85 = 29.88

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

During the past 13 years, the highest Shiller P/E Ratio of Sonic Corp was 44.40. The lowest was 8.82. And the median was 21.05.

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 local exchange's currency.

Sonic Corp Annual Data

 Aug07 Aug08 Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 e10 0.60 0.71 0.74 0.74 0.75 0.75 0.76 0.79 0.81 0.85

Sonic Corp Quarterly Data

 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 e10 0.79 0.78 0.77 0.79 0.81 0.81 0.81 0.83 0.85 0.85
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