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Cerner Corp  (NAS:CERN) E10: $1.23 (As of Sep. 2017)

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.

Cerner Corp's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.520. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.23 for the trailing ten years ended in Sep. 2017.

As of today, Cerner Corp's current stock price is $66.68. Cerner Corp's E10 for the quarter that ended in Sep. 2017 was $1.23. Cerner Corp's Shiller PE Ratio of today is 54.21.

During the past 13 years, the highest Shiller PE Ratio of Cerner Corp was 94.06. The lowest was 33.42. And the median was 70.89.


Historical Data

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

* Premium members only.

Cerner Corp Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.55 0.66 0.78 0.91 1.07

Cerner Corp Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.04 1.07 1.12 1.18 1.23

Competitive Comparison
* 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.


Calculation

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, Cerner Corp's adjusted earnings per share data for the three months ended in Sep. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Sep. 2017 (Change)*Current CPI (Sep. 2017)
=0.52/246.819*246.819
=0.520

Current CPI (Sep. 2017) = 246.819.

Cerner Corp Quarterly Data

per share eps CPI Adj_EPS
200712 0.125 210.036 0.147
200803 0.110 213.528 0.127
200806 0.105 218.815 0.118
200809 0.135 218.783 0.152
200812 0.215 210.228 0.252
200903 0.123 212.709 0.143
200906 0.130 215.693 0.149
200909 0.143 215.969 0.163
200912 0.180 215.949 0.206
201003 0.148 217.631 0.168
201006 0.165 217.965 0.187
201009 0.180 218.439 0.203
201012 0.205 219.179 0.231
201103 0.185 223.467 0.204
201106 0.210 225.722 0.230
201109 0.225 226.889 0.245
201112 0.260 225.672 0.284
201203 0.255 229.392 0.274
201206 0.280 229.478 0.301
201209 0.280 231.407 0.299
201212 0.320 229.601 0.344
201303 0.310 232.773 0.329
201306 0.320 233.504 0.338
201309 0.330 234.149 0.348
201312 0.170 233.049 0.180
201403 0.340 236.293 0.355
201406 0.370 238.343 0.383
201409 0.370 238.031 0.384
201412 0.420 234.812 0.441
201503 0.320 236.119 0.335
201506 0.330 238.638 0.341
201509 0.420 237.945 0.436
201512 0.480 236.525 0.501
201603 0.430 238.132 0.446
201606 0.480 241.018 0.492
201609 0.490 241.428 0.501
201612 0.440 241.432 0.450
201703 0.520 243.801 0.526
201706 0.530 244.955 0.534
201709 0.520 246.819 0.520

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 PE 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.

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

Shiller PE Ratio=Share Price/E10
=66.68/1.23
=54.21

* 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 Cerner Corp was 94.06. The lowest was 33.42. And the median was 70.89.


Be Aware

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


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