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Cisco Systems Inc  (NAS:CSCO) E10: $1.67 (As of Jul. 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.

Cisco Systems Inc's adjusted earnings per share data for the three months ended in Jul. 2017 was $0.480. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.67 for the trailing ten years ended in Jul. 2017.

As of today, Cisco Systems Inc's current stock price is $36.50. Cisco Systems Inc's E10 for the quarter that ended in Jul. 2017 was $1.67. Cisco Systems Inc's Shiller PE Ratio of today is 21.86.

During the past 13 years, the highest Shiller PE Ratio of Cisco Systems Inc was 59.16. The lowest was 13.76. And the median was 19.65.


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.

Cisco Systems Inc Annual Data

Jul08 Jul09 Jul10 Jul11 Jul12 Jul13 Jul14 Jul15 Jul16 Jul17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.28 1.38 1.45 1.57 1.67

Cisco Systems Inc Quarterly Data

Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17
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 1.58 1.61 1.64 1.67 1.67

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, Cisco Systems Inc's adjusted earnings per share data for the three months ended in Jul. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Jul. 2017 (Change)*Current CPI (Jul. 2017)
=0.48/244.786*244.786
=0.480

Current CPI (Jul. 2017) = 244.786.

Cisco Systems Inc Quarterly Data

per share eps CPI Adj_EPS
200710 0.350 208.936 0.410
200801 0.330 211.080 0.383
200804 0.290 214.823 0.330
200807 0.340 219.964 0.378
200810 0.370 216.573 0.418
200901 0.260 211.143 0.301
200904 0.230 213.240 0.264
200907 0.190 215.351 0.216
200910 0.300 216.177 0.340
201001 0.320 216.687 0.361
201004 0.370 218.009 0.415
201007 0.340 218.011 0.382
201010 0.340 218.711 0.381
201101 0.270 220.223 0.300
201104 0.330 224.906 0.359
201107 0.220 225.922 0.238
201110 0.330 226.421 0.357
201201 0.400 226.665 0.432
201204 0.400 230.085 0.426
201207 0.360 229.104 0.385
201210 0.390 231.317 0.413
201301 0.590 230.280 0.627
201304 0.460 232.531 0.484
201307 0.420 233.596 0.440
201310 0.370 233.546 0.388
201401 0.270 233.916 0.283
201404 0.420 237.072 0.434
201407 0.430 238.250 0.442
201410 0.350 237.433 0.361
201501 0.460 233.707 0.482
201504 0.470 236.599 0.486
201507 0.460 238.654 0.472
201510 0.480 237.838 0.494
201601 0.620 236.916 0.641
201604 0.460 239.261 0.471
201607 0.550 240.628 0.560
201610 0.460 241.729 0.466
201701 0.470 242.839 0.474
201704 0.500 244.524 0.501
201707 0.480 244.786 0.480

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.

Cisco Systems Inc's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=36.50/1.67
=21.86

* 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 Cisco Systems Inc was 59.16. The lowest was 13.76. And the median was 19.65.


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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