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GuruFocus has detected 4 Warning Signs with Arch Capital Group Ltd $ACGL.
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Arch Capital Group Ltd (NAS:ACGL)
Median PS Value
$58.74 (As of Today)

This valuation method assumes that the stock valuation will revert to its historical mean in terms of Price/Sales Ratio. The reason we use P/S Ratio instead of P/E Ratio or P/B Ratio is because Price/Sales Ratio is independent of profit margin, and can be applied to a broader range of situations.

Median P/S Value is calculated as trailing twelve months (TTM) revenue per share times 10-Year median P/S ratio. Arch Capital Group Ltd's revenue per share for the trailing twelve months (TTM) ended in Dec. 2016 was $35.816. Arch Capital Group Ltd's 10-Year median P/S ratio is 1.64. Therefore, the Median P/S Value for today is $58.74.

As of today, Arch Capital Group Ltd's share price is $94.56. Arch Capital Group Ltd's median P/S value is $58.74. Therefore, Arch Capital Group Ltd's Price to Median P/S Value Ratio for today is 1.61.

ACGL' s Price-to-Median-PS-Value Range Over the Past 10 Years
Min: 0.38   Max: 2.79
Current: 1.61

0.38
2.79

During the past 13 years, the highest Price to Median P/S Value Ratio of Arch Capital Group Ltd was 2.79. The lowest was 0.38. And the median was 0.99.

ACGL's Price-to-Median-PS-Value is ranked lower than
92% of the 71 Companies
in the Global Insurance - Reinsurance industry.

( Industry Median: 1.03 vs. ACGL: 1.61 )

Definition

Arch Capital Group Ltd's Median P/S Value for today is calculated as

Median P/S Value=Total Annual Sales / Shares Outstanding*10-Year Median P/S Ratio
=Revenue per Share (TTM)*10-Year Median P/S Ratio
=35.816*1.64
=58.74

10-Year Median P/S Ratio is 1.64.
Arch Capital Group Ltd's revenue per share for the trailing twelve months (TTM) ended in Dec. 2016 was 8.729 (Mar. 2016 ) + 9.578 (Jun. 2016 ) + 9.585 (Sep. 2016 ) + 7.924 (Dec. 2016 ) = $35.816.

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


Explanation

This valuation method assumes that the stock valuation will revert to its historical mean in terms of Price/Sales Ratio. The reason we use P/S Ratio instead of P/E Ratio or P/B Ratio is because Price/Sales Ratio is independent of profit margin, and can be applied to a broader range of situations.

It also assumes that over time the profit margin is constant. If a company increases its profit margin to a sustainable level, this value might under-estimate its value. If it has permanent declined profit margins, this may over-estimate the company’s value.

Arch Capital Group Ltd's Price to Median P/S Value Ratio for today is calculated as

Price to Median P/S Value=Share Price/Median P/S Value
=94.56/58.74
=1.61

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


Related Terms

P/E Ratio, P/B Ratio, P/S Ratio, Intrinsic Value (DCF Projected), Intrinsic Value (DCF), Intrinsic Value (DE), Graham Number, GAVA


Historical Data

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

Arch Capital Group Ltd Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
medpsvalue 25.3424.7930.6833.4036.2841.3142.5948.0851.0758.74

Arch Capital Group Ltd Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
medpsvalue 46.9048.0850.5451.4151.6751.0751.5754.0057.4858.74
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