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Check Point Software Technologies Ltd  (NAS:CHKP) E10: $3.12 (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.

Check Point Software Technologies Ltd's adjusted earnings per share data for the three months ended in Sep. 2017 was $1.160. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $3.12 for the trailing ten years ended in Sep. 2017.

As of today, Check Point Software Technologies Ltd's current stock price is $103.95. Check Point Software Technologies Ltd's E10 for the quarter that ended in Sep. 2017 was $3.12. Check Point Software Technologies Ltd's Shiller PE Ratio of today is 33.32.

During the past 13 years, the highest Shiller PE Ratio of Check Point Software Technologies Ltd was 39.36. The lowest was 15.23. And the median was 29.99.


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.

Check Point Software Technologies Ltd 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 1.77 2.01 2.24 2.48 2.80

Check Point Software Technologies Ltd 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 2.71 2.80 2.91 3.02 3.12

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, Check Point Software Technologies Ltd'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)
=1.16/246.819*246.819
=1.160

Current CPI (Sep. 2017) = 246.819.

Check Point Software Technologies Ltd Quarterly Data

per share eps CPI Adj_EPS
200712 0.400 210.036 0.470
200803 0.360 213.528 0.416
200806 0.360 218.815 0.406
200809 0.370 218.783 0.417
200812 0.410 210.228 0.481
200903 0.380 212.709 0.441
200906 0.360 215.693 0.412
200909 0.430 215.969 0.491
200912 0.510 215.949 0.583
201003 0.460 217.631 0.522
201006 0.480 217.965 0.544
201009 0.540 218.439 0.610
201012 0.640 219.179 0.721
201103 0.570 223.467 0.630
201106 0.600 225.722 0.656
201109 0.630 226.889 0.685
201112 0.750 225.672 0.820
201203 0.680 229.392 0.732
201206 0.710 229.478 0.764
201209 0.730 231.407 0.779
201212 0.850 229.601 0.914
201303 0.730 232.773 0.774
201306 0.760 233.504 0.803
201309 0.800 234.149 0.843
201312 0.990 233.049 1.048
201403 0.780 236.293 0.815
201406 0.830 238.343 0.860
201409 0.840 238.031 0.871
201412 0.980 234.812 1.030
201503 0.860 236.119 0.899
201506 0.880 238.638 0.910
201509 0.920 237.945 0.954
201512 1.080 236.525 1.127
201603 0.950 238.132 0.985
201606 0.950 241.018 0.973
201609 0.990 241.428 1.012
201612 1.300 241.432 1.329
201703 1.080 243.801 1.093
201706 1.120 244.955 1.129
201709 1.160 246.819 1.160

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.

Check Point Software Technologies Ltd's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=103.95/3.12
=33.32

* 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 Check Point Software Technologies Ltd was 39.36. The lowest was 15.23. And the median was 29.99.


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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