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* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

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* The bar in red indicates where Biogen Inc's Shiller PE Ratio falls into.

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Calculation

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.

Biogen Inc's Shiller P/E Ratio for today is calculated as

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

Biogen Inc's E10 for the fiscal year that ended in Dec18 is calculated as:

For example, Biogen Inc's adjusted earnings per share data for the three months ended in Mar. 2019 was:

Current CPI (Mar. 2019) = 254.202.

Biogen Inc Quarterly Data

	per_share_eps	CPI	Adj_EPS
200906	0.490	215.693	0.577
200909	0.950	215.969	1.118
200912	1.070	215.949	1.260
201003	0.800	217.631	0.934
201006	1.120	217.965	1.306
201009	1.050	218.439	1.222
201012	0.990	219.179	1.148
201103	1.200	223.467	1.365
201106	1.180	225.722	1.329
201109	1.430	226.889	1.602
201112	1.220	225.672	1.374
201203	1.250	229.392	1.385
201206	1.610	229.478	1.783
201209	1.670	231.407	1.835
201212	1.230	229.601	1.362
201303	1.790	232.773	1.955
201306	2.060	233.504	2.243
201309	2.050	234.149	2.226
201312	1.920	233.049	2.094
201403	2.020	236.293	2.173
201406	3.010	238.343	3.210
201409	3.620	238.031	3.866
201412	3.740	234.812	4.049
201503	3.490	236.119	3.757
201506	3.930	238.638	4.186
201509	4.150	237.945	4.434
201512	3.770	236.525	4.052
201603	4.430	238.132	4.729
201606	4.790	241.018	5.052
201609	4.710	241.428	4.959
201612	2.990	241.432	3.148
201703	3.460	243.801	3.608
201706	4.070	244.955	4.224
201709	5.790	246.819	5.963
201712	-1.410	246.524	-1.454
201803	5.540	249.554	5.643
201806	4.180	251.989	4.217
201809	7.150	252.439	7.200
201812	4.730	251.233	4.786
201903	7.150	254.202	7.150

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

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Explanation

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.

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Be Aware

The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a company's business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.

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